In the context of managing exchange rate risks, when companies take advantage of spot exchange rates, they:

A) buy foreign currency at present-day rates in anticipation of future transactions.
B) make an agreement with a bank to exchange currency at some future date.
C) simultaneously purchase and sell a given amount of currency at two different rates.
D) abandon their own country's currency to adopt the most stable currency in the international market.

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Natalie Pryor · Accepted Answer

Final Answer : A, Explanation :  Buying foreign currency at present-day rates for future transactions is a direct application of using spot exchange rates to manage exchange rate risks. This allows companies to lock in costs and avoid the risk of currency value fluctuations.

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