Q1)

Hedging Net Exposures is which of the following?

A		Hedging short or long exposures that arise from the "network" of international business transactions
B		Hedging all of the exposures captured in the "fishing net" of the entire global network of a firm's exposures to foreign currencies.
C		Hedging foreign exchange exposures by means of the "net" otherwise known as the internet.
D		Hedging only the net exposure of a currency when a firm has both payables and receivables in that same currency.

Q2)

What is contingent foreign exchange exposure?

A		Firm foreign exchange exposures that arise from contracts that have foreign currency payables or receivables that are well understood and are highly likely to be paid or received.
B		Foreign exchange exposures that arise within the activities of correspondant banks
C		Foreign exchange exposures that are not able to be hedged because they are in a currency that is not freely traded, for example, a currency in a country that only allows the currency to be traded in the spot market and not in the forward market.
D		Contingent foreign exchange exposure is the risk due to uncertain situations in which a firm does not know if it will face exchange risk exposure in the future, or does not know the exact amount of that exposure.

Q3)

This shape on a foreign exchange profit and loss diagram is typical of which type of hedging contract? xxxxxxxxx x x x x

A		Buying a put option
B		A forward
C		Buying a call option
D		Writting (or selling) a put option

Q4)

This shape on a foreign exchange profit and loss diagram is typical for which type of hedging contract?

x x x x x x

A		A long call
B		A long forward
C		A short forward
D		A short put