If Lazer Ltd

question 34

Multiple Choice

If Lazer ltd. desired to lock in the maximum it would have to pay for its net payables in euros but wanted to be able to capitalize if the euro depreciates substantially against the pound by the time payment is to be made, the most appropriate hedge would be:

• A) a money market hedge.
• B) purchasing euro put options.
• C) a forward purchase of euros.
• D) purchasing euro call options.
• E) selling euro call options.

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Definitions:

Method

A systematic approach or procedure for achieving a particular objective.

Practice

The act of performing an activity repeatedly or regularly in order to improve or maintain one's proficiency.

Mental Rehearsal

The practice of visualizing or mentally practicing a task or performance in advance.

Ability to Adapt

The capacity to adjust to new conditions or environments, showing flexibility and resilience.