Post Utme Madonna University 2020 Commerce Question 40

Practice objective / multiple choice question 40 from the 2020 Post Utme Madonna University Commerce examination.

Post Utme Madonna University 2020 Commerce Objective / Multiple Choice
Question 40 POST_UTME_MADONNA_UNIVERSITY • 2020 • COMMERCE • objective

A business uses a foreign exchange contract to hedge against currency fluctuations. What is the primary purpose of this contract?

Answer Options

A. To fix the exchange rate
Correct Answer B. To reduce exchange rate risk
C. To increase exchange rate gains
D. To speculate on exchange rate movements
Correct Answer
B
Correct Option:
To reduce exchange rate risk

About This Question

This is Post Utme Madonna University 2020 Commerce Question 40. It is one of the objective questions from the 2020 Post Utme Madonna University Commerce examination.

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