Assume a Japanese firm is going to receive an amount of exports sales in U.S. dollars. Assume that the forward rate and spot rate of the Japanese yen are equal. If the Japanese firm expects the U.S. dollar to ____ against the yen, it would likely wish to hedge. It could hedge by ____ dollars forward.
Assume a Japanese firm is going to receive an amount of exports sales in U.S. dollars. Assume that the forward rate and spot rate of the Japanese yen are equal. If the Japanese firm expects the U.S. dollar to ____ against the yen, it would likely wish to hedge. It could hedge by ____ dollars forward.
Chapter18: Long-term Debt Financing
Section: Chapter Questions
Problem 2SBD
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Assume a Japanese firm is going to receive an amount of exports sales in U.S. dollars. Assume that the forward rate and spot rate of the Japanese yen are equal. If the Japanese firm expects the U.S. dollar to ____ against the yen, it would likely wish to hedge. It could hedge by ____ dollars forward.
A.
B.
appreciate; buying
C.
appreciate; selling
D.
depreciate; buying
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