Explore BrainMass

Explore BrainMass

    Hedging translation exposures backfires and adoption of the Euro

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Hedging translation exposure with forward contracts can backfire if the currency being hedged depreciates.
    true.
    false.

    The euro is the currency:
    adopted in all western European countries as of 1999.
    adopted in all eastern European countries as of 1999.
    adopted in all European countries as of 1999.
    none of the above.

    Please provide answer and why...

    © BrainMass Inc. brainmass.com March 4, 2021, 6:21 pm ad1c9bdddf
    https://brainmass.com/business/international-finance/hedging-translation-exposures-backfires-adoption--euro-41234

    Solution Preview

    True. If the currency being hedged depreciates, the agent has to buy the hedged currency at a higher than market rate, ...

    Solution Summary

    The expert examines hedging translations exposures backfires and adoption of the Euro.

    $2.49

    ADVERTISEMENT