A company due to pay a certain amount of a foreign currency in the future decides...

 

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A company due to pay a certain amount of a foreign currency in the future decides to hedge with futures contracts. Which of the following best describes the advantage of hedging? It leads to a better exchange rate being paid It leads to a more predictable exchange rate being paid It caps the exchange rate that will be paid It provides a floor for the exchange rate that will be paid A company due to pay a certain amount of a foreign currency in the future decides to hedge with futures contracts. Which of the following best describes the advantage of hedging? It leads to a better exchange rate being paid It leads to a more predictable exchange rate being paid It caps the exchange rate that will be paid It provides a floor for the exchange rate that will be paid

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option b It leads to a more predictable exchange rate being paid Reason Hedging is designed to ... View the full answer