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If you have a long position in a foreign currency, you can hedge with:______.

a) a short position in a currency forward contract.
b) borrowing in the domestic and foreign money markets.
c) a short position in an exchange-traded futures option.
d) a short position in foreign currency warrants.

User Sohil Omer
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1 Answer

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Answer:

a) a short position in a currency forward contract

Step-by-step explanation:

If you have long exposure, then you hedge it with short exposure in forward market. In future options, you need to pay a premium, but in the forward market, you don't need to pay any premium and it can be customized.

User Mystic
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