Which of the following reflects a hedge of net payables on British pounds by a U.S. firm? A. sell a currency call option in British pounds. B. borrow U.S. dollars, convert them to pounds, and invest them in a British pound deposit. C. sell pounds forward. D. purchase a currency put option in British pounds.
Which of the following reflects a hedge of net payables on British pounds by a U.S. firm? A. sell a currency call option in British pounds. B. borrow U.S. dollars, convert them to pounds, and invest them in a British pound deposit. C. sell pounds forward. D. purchase a currency put option in British pounds.
Chapter11: Managing Transaction Exposure
Section: Chapter Questions
Problem 24QA
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Which of the following reflects a hedge of net payables on British pounds by a U.S. firm?
A.
sell a currency call option in British pounds.
B.
borrow U.S. dollars, convert them to pounds, and invest them in a British pound deposit.
C.
sell pounds forward.
D.
purchase a currency put option in British pounds.
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