What is the paradox of hedging balance sheet exposure?
A. Real costs can be incurred to hedge an unrealized translation adjustment.
B. The hedging process rarely works the way management intended.
C. Hedging is a conceptual process that is nearly impossible to undertake in the real world.
D. Markets have yet to be developed that offer the kinds of derivative instruments required for hedging.
Answer:A
What is the paradox of hedging balance sheet exposure?
A. Real costs can be incurred to hedge an unrealized translation adjustment. B. The hedging process rarely works the way management intended. C. Hedging is a conceptual process that is nearly impossible to undertake in the real world. D. Markets have yet to be developed that offer the kinds of derivative instruments required for hedging.