Which of the Following Reflects a Hedge of Net Receivables

question 28

Multiple Choice

Which of the following reflects a hedge of net receivables in British pounds by a US firm?

• A) Purchase a currency put option in British pounds.
• B) Sell pounds forward.
• C) Borrow US dollars, convert them to pounds, and invest them in a British pound deposit.
• D) A and B

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Definitions:

Glucose

A simple sugar that is an important energy source in living organisms and is a component of many carbohydrates.

Hamstring Group

A collection of three muscles at the back of the thigh that are responsible for bending the knee.

Teres Major

A muscle of the upper limb that helps in the rotation and adduction of the arm.

Achilles Tendon

A strong and fibrous tendon that connects the muscles in the back of your calf to your heel bone, crucial for walking, running, and jumping.