CFA level 3 practice exam #25

<b>25. To rebalance the hedge today, the firm would least likely need to:</b>

<b>A) buy ARS 500,000 forward ✘</b>

(B) engage in a mismatched FX swap

<b>(C) sell ARS500,000 forward.</b>

 
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To rebalance the hedge, the firm must reduce the size of the hedge, as the foreign investment went down in ARS value. Selling forward is incorrect because it will increase the size of the hedge.

Which is the correct answer? It says C, but the explanation says selling forward is incorrect

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