If a Firm Is Due to Be Paid in Euros

question 87

Multiple Choice

If a firm is due to be paid in euros in two months, to hedge against exchange rate risk the firm should ________.

• A) sell foreign exchange futures short
• B) buy foreign exchange futures long
• C) stay out of the exchange futures market
• D) buy foreign exchange forward contracts long

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Definitions:

Spinal Column

The flexible longitudinal column made of a series of bones called vertebrae, which houses the spinal cord and provides structural support to the body.

Adult Human

An individual who has reached a mature stage of growth and development, typically considered to begin after adolescence.

Chimpanzee

A species of great ape native to the forests and savannahs of tropical Africa, known for their complex social structures and behaviors.

Curves

Mathematical entities described by points that map a continuous path; they can be classified in various ways, such as linear, polynomial, or sinusoidal, based on their mathematical properties.