Question
9.3) Which three statement/statements regarding hedging instruments are correct? A Currency options are an internal hedging instrument used to mitigate exchange rate risks. B Futures
9.3) Which three statement/statements regarding hedging instruments are correct? A Currency options are an internal hedging instrument used to mitigate exchange rate risks. B Futures are asymmetric risk management instruments. C Long currency options are more expensive than forwards because of the premium. D Money market hedge allows hedging of long-term economic exposure since the interest rates to be paid are in foreign currency. E Options have higher opportunity cost than forward rate agreements. F Hedging foreign currency cash in-flows from high interest rate countries with forward rate agree-ments is less expensive since the forward rate quotes at a discount. G Exchange traded hedging instruments have high liquidity and low counter-party risks.
Please elaborate and explain.
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