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Describe the process of a money market hedge for payables. Do not rewrite the formula, explain it.

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter11: Managing Transaction Exposure

Section: Chapter Questions

Problem 2ST

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Describe the process of a money market hedge for payables. Do not rewrite the formula, explain it.

Definition Definition Financial market that deals in securities or assets that are short-term in nature. The money market is responsible for keeping up the liquidity of the businesses and the organizations. These securities are usually held for a period of 12 months or less and are issued by institutions that require cash or funds for their short-term cash flow requirements. The money market is regulated by the federal government.

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Describe the process of a money market hedge for payables. Please do not just rewrite the formula, explain it as well.
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