Question

Last week, Saturn Tide a U.S.-based energy firm, entered into an agreement with another party to exchange currency and execute the deal in eighteen months. What is Saturn Tide using to insure itself against foreign exchange risk?

Answer 1

Answer: Hedging

Step-by-step explanation:

Hedging is the term which is used to determining the risk management system and also eliminating all the uncertainty element from the given situation.

The hedging is one of the type of investment process that helps in protecting from the finance related risk and by using this process the people are basically trying protect them from all the negative events.

According to the given question, Hedging is basically using to insure itself from all the foreign exchange risks in the firm . Therefore, Hedging is the correct answer.