GARP Exam 2016-FRR Topic 2 Question 8 Discussion

Actual exam question for GARP's 2016-FRR exam

Question #: 8
Topic #: 2

[All 2016-FRR Questions]

For which one of the following four reasons do corporate customers use foreign exchange derivatives?

I . To lock in the current value of foreign-denominated receivables

II . To lock in the current value of foreign-denominated payables

III . To lock in the value of expected future foreign-denominated receivables

IV . To lock in the value of expected future foreign-denominated payables

AII

BI and IV

CII and III

DI, II, III, IV

Show Suggested Answer

Suggested Answer: D

by Clay at Jul 06, 2025, 12:32 AM

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Shawnta

5 days ago

I'm going with D. Why not lock in the value of everything, you know? Gotta cover all your bases, right?

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Tomoko

6 days ago

Yes, that's true. It helps them manage risks and plan their finances more effectively.

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Gerald

8 days ago

Hmm, I think the correct answer is C. Locking in the value of foreign-denominated payables and expected future foreign-denominated receivables seems like a common practice for corporate customers.

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Rossana

3 days ago

User 1: I think the answer is B. Locking in the current value of foreign-denominated receivables and expected future foreign-denominated payables makes sense.

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