When foreign currency assets and liabilities match in terms of amount of exposure and timing of maturities, it is described as:

Correct option is B

A natural hedge occurs when a business has foreign currency assets and liabilities that match in amount and timing, thus reducing the risk associated with currency fluctuations. This self-hedging strategy helps mitigate exchange rate risk without the need for external financial instruments.
Information Booster:
· Natural hedge is often used by companies that deal with foreign operations or conduct transactions in foreign currencies.
· Financial hedge involves using financial instruments like options or forward contracts to protect against currency fluctuations.
· Perfect hedge refers to a situation where the risk is completely eliminated through hedging, which is difficult to achieve in practice.
· Netting involves offsetting receivables and payables in the same currency, usually for transactions between subsidiaries or related companies.
Additional Information:
· Financial hedge requires active management and the use of financial derivatives to protect against currency risk.
· Perfect hedge is idealized and rarely achieved, as some residual risk usually remains.
· Netting reduces the complexity of cross-border payments by simplifying foreign exchange transactions between related entities.