Examveda

The true cost of hedging transaction exposure by using forward market is

A. difference between agreed rate and spot rate at the time of entering into contract

B. difference between agreed rate and spot rate on the due date of contract

C. forward premium

D. discount annualised

Answer: Option B


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Match List-I with List-II and select the correct answer:

List-I List-II
a. Modigliani Miller approach 1. Commercial papers
b. Net operating income approach 2. Working capital management
c. Short-term money market instrument 3. Capital structure
d. Factoring 4. Arbitrage

A. a-4, b-3, c-1, d-2

B. a-3, b-4, c-1, d-2

C. a-2, b-3, c-1, d-4

D. a-3, b-2, c-4, d-1