Post Utme Mountain Top University 2024 Commerce Question 33

Practice objective / multiple choice question 33 from the 2024 Post Utme Mountain Top University Commerce examination.

Post Utme Mountain Top University 2024 Commerce Objective / Multiple Choice
Question 33 POST_UTME_MOUNTAIN_TOP_UNIVERSITY • 2024 • COMMERCE • objective

A bank's foreign exchange department is responsible for managing the bank's foreign currency transactions. The department uses a system of forward contracts to hedge against exchange rate risks. What is the primary purpose of a forward contract?

Answer Options

A. To speculate on exchange rate movements
Correct Answer B. To hedge against exchange rate risks
C. To invest in foreign currencies
D. To borrow foreign currencies
Correct Answer
B
Correct Option:
To hedge against exchange rate risks

About This Question

This is Post Utme Mountain Top University 2024 Commerce Question 33. It is one of the objective questions from the 2024 Post Utme Mountain Top University Commerce examination.

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