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    Question

    Exchange rate risk in international trade is mainly

    managed through:
    A Leasing Correct Answer Incorrect Answer
    B Options & forward contracts Correct Answer Incorrect Answer
    C Factoring Correct Answer Incorrect Answer
    D Inventory turnover Correct Answer Incorrect Answer

    Solution

    Companies hedge currency fluctuations using forwards, options, swaps, which lock or insure exchange rates. тАв Forwards lock in a future exchange rate. тАв Options provide insurance-like protection. These are standard hedging instruments in international trade. Others donтАЩt manage FX risk: тАв Leasing тЖТ financing method тАв Factoring тЖТ receivable management тАв Inventory turnover тЖТ operational metri

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