Question

A U.S. corporation with net receivables in euro could hedge by _________________. A. buying euro forward...

A U.S. corporation with net receivables in euro could hedge by _________________.

A. buying euro forward

B. selling euro forward

C. buying euro futures

D. buying euro call options

E. both B and D

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Answer #1

Option "C" is correct.

The U.S. corporation could agree to a futures contract to sell euros at a specified date in the future and at a specified price. This locks in the exchange rate at which the euros could be sold.

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