Foreign exchange rate risk be fully covered or hedged

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Reference no: EM13888652

Forward premiums and discounts imply that there is risk in foreign exchange transactions.

a. Explain the three types of FX risk?

b. How can foreign exchange rate risk be fully covered or hedged?

c. Foreign exchange risk also allows for speculation through financial instruments known as foreign exchange derivatives. What are three common types of foreign exchange derivatives and how do they work?

Reference no: EM13888652

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