question 18 asks to identify the type of hedging but nowhere in that paragraph mentioned about hedging.
the paragraph says “analysts at garrison have regressed the historical returns of the HI stock with changes in value of the yen”, then the question suddenly asks what type of hedging it is.
then the solution says “regressing the foreign market return measured in the investor’s domestic currency versus the foreign currency value produces a minimum variance hedge ratio, and the intent is to minimize the volatility of the return to the domestic investor”, but the vignette lacks context of board’s preference.
then, i googled this question word by word, and found out it was a schweser’s previous year question. apparently they did not bother to make some new questions?