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NEW QUESTION: 1
Company A is looking to protect itself from transaction exchange rate risk.
Company A does not require 100% of the value of transaction to be protected, and it would like the method it uses to have the following characteristics
* An agreed exchange rate for a specified period where both parties have a legal obligation
* A separation of the contract guaranteeing the pnce of the currency from the underlying transaction.
Which of the following would best provide the type of protection from exchange rate risk company A wants?
B. Forward contract
C. Floating exchange rate
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