Diversification of a company's operations
Purchasing of currency options
Exposure netting
Both A and C
Answer is Wrong!
Answer is Right!
The correct answer is D. Both A and C.
Operational techniques are methods that companies use to manage their operations and reduce risk. Some common operational techniques include:
- Diversification: This involves spreading a company’s operations across different countries, industries, or products. This can help to reduce the risk of losses from changes in the economy or from specific events.
- Purchasing of currency options: This involves buying the right to buy or sell a currency at a specified price in the future. This can help to protect a company from losses due to changes in exchange rates.
- Exposure netting: This involves offsetting the risks of different exposures. For example, a company that exports to the United States and imports from China could offset the risk of changes in the value of the dollar by buying currency options or by entering into a forward contract.
These are just a few examples of operational techniques. The specific techniques that a company uses will depend on its particular circumstances.