Question

the 4 functions of the foreign exchange market. Your company is making money in another country and you want to insure yourself against any change in value between this country’s currency and the Canadian dollar. You don’t want to make money in this transaction, however you don’t want to lose money. Which of the four functions is this, and why do you say this?​

Answer 1

Answer:

Exchange rate risk cannot be avoided altogether when investing overseas, but it canbe mitigated considerably through the use of hedging techniques. The easiest solution is toinvest in hedged investments such as hedged ETFs. The fund manager of a hedged ETF canhedge forex risk at a relatively lower cost.

Answer 2

Answer:

Exchange rate risk cannot be avoided altogether when investing overseas, but it canbe mitigated considerably through the use of hedging techniques. The easiest solution is toinvest in hedged investments such as hedged ETFs. The fund manager of a hedged ETF canhedge forex risk at a relatively lower cost.

Explanation:

Exchange rate risk cannot be avoided altogether when investing overseas, but it canbe mitigated considerably through the use of hedging techniques. The easiest solution is toinvest in hedged investments such as hedged ETFs. The fund manager of a hedged ETF canhedge forex risk at a relatively lower cost.