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In recent decades, foreign exchange rates have become more volatile and finance has become more globalized. Both factors have caused this risk to increase significantly.

In recent decades, foreign exchange rates have become more volatile and finance has become more globalized. Both factors have caused this risk to increase significantly. What kind of financial instrument(s) can be used to hedge exchange rate risk?

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Futures.

Forwards, futures, options, and swap aggreements.

Swap agreements.

Options and swap agreements.

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