Cross-Hedging Strategy Assume that the country of Dreeland has a currency (called the dree) that tends to move in tandem with the Chilean peso and is expected to continue to move in tandem with the Chilean peso in the future. Indianapolis Co., a U.S. firm, has a large amount of receivables denominated in dree. It expects that the dree will depreciate against the dollar over time. No derivatives are available on the dree. Indianapolis Co. considers the following strategies to reduce its exchange rate risk:
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