Which of the Following Is the Most Unlikely Strategy for a U.S

question 108

Multiple Choice

Which of the following is the most unlikely strategy for a U.S. firm that will be purchasing Swiss francs in the future and desires to avoid exchange rate risk (assume the firm has no offsetting position in francs) ?

• A) Purchase a call option on francs.
• B) Obtain a forward contract to purchase francs forward.
• C) Sell a futures contract on francs.
• D) All of these are appropriate strategies for the scenario described.

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Definitions:

Negative Reinforcement

A type of conditioning where an undesirable outcome or event is removed following a behavior, increasing the likelihood of that behavior's occurrence in the future.

Social Cognitive Theory

A theoretical framework that emphasizes the importance of observational learning, social experiences, and environmental factors in the development of behaviors.

Observing

involves carefully watching or monitoring phenomena, behaviors, or activities to gather information, often as part of a research process or to learn.

Imitating

The act of copying someone else's actions, behaviors, or practices, either consciously or unconsciously.