A company to pay a certain amount of foreign currency in the future decides to...
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Finance
A company to pay a certain amount of 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.
O It caps the exchange rate that will be paid.
It provides a floor for the exchange rate that will be paid.
It leads to a more predictable exchange rate being paid.
A company to pay a certain amount of 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.
O It caps the exchange rate that will be paid.
It provides a floor for the exchange rate that will be paid.
It leads to a more predictable exchange rate being paid.
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