ABC Ltd., an Australian company, is expecting to export an equipment to China in December. The transaction will be settled in Chinese Yuan (CNY). Which of the following futures position between Chinese Yuan and Australian Dollar is appropriate for ABC Ltd. to hedge the foreign exchange risk? The company should short futures on the Chinese Yuan, O More than one of the other strategies is appropriate. O The company should long futures on the Australian Dollar. None of the other strategies is appropriate. O The company should long futures on the Chinese Yuan.

ABC Ltd., an Australian company, is expecting to export an equipment to China in December. The transaction will be settled in Chinese Yuan (CNY). Which of the following futures position between Chinese Yuan and Australian Dollar is appropriate for ABC Ltd. to hedge the foreign exchange risk? The company should short futures on the Chinese Yuan, O More than one of the other strategies is appropriate. O The company should long futures on the Australian Dollar. None of the other strategies is appropriate. O The company should long futures on the Chinese Yuan.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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