Post Utme Al Hikmah University 2022 Commerce Question 18

Practice objective / multiple choice question 18 from the 2022 Post Utme Al Hikmah University Commerce examination.

Post Utme Al Hikmah University 2022 Commerce Objective / Multiple Choice
Question 18 POST_UTME_AL-HIKMAH_UNIVERSITY • 2022 • COMMERCE • objective

A company is considering investing in a foreign market. The company's financial advisor recommends that they purchase a foreign currency option to hedge against exchange rate risk. Which of the following is the most likely outcome?

Answer Options

Correct Answer A. The company will benefit from the foreign currency option because it will protect them against exchange rate fluctuations.
B. The company will lose money from the foreign currency option because it will not be able to hedge against exchange rate risk.
C. The company will not benefit from the foreign currency option because it will not be able to take advantage of favorable exchange rates.
D. The company will not lose money from the foreign currency option because it will be able to hedge against exchange rate risk.
Correct Answer
A
Correct Option:
The company will benefit from the foreign currency option because it will protect them against exchange rate fluctuations.

About This Question

This is Post Utme Al Hikmah University 2022 Commerce Question 18. It is one of the objective questions from the 2022 Post Utme Al Hikmah University Commerce examination.

View More Post Utme Al Hikmah University 2022 Commerce Questions More Post Utme Al Hikmah University Practice Questions Back to Questions

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Chat with Support