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You are traveling to Europe in six months and you believe the Euro (€) is going...

You are traveling to Europe in six months and you believe the Euro (€) is going to appreciate against the dollar ($).
a. List two ways you could hedge this situation and protect yourself against the appreciation.
b. What is the primary advantage of hedging a currency by purchasing a futures contract?

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Answer #1

1.
Purchase Euro call option
Purchase Euro futures

2.
No counterparty risk and liquidity

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