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Foreign exchange risk can be hedged using financial instruments (forwards, options). Evaluate the pros and cons of the use of financial instruments in hedging. That

Foreign exchange risk can be hedged using financial instruments (forwards, options). Evaluate the pros and cons of the use of financial instruments in hedging. That is,

How do you decide which financial instrument or combination of instruments to use? Can financial instruments be used to completely eliminate all exposure to f/x risk? Why or why not?

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