If a Salerno Plc Desired to Lock in a Minimum

question 15

Multiple Choice

If a Salerno plc desired to lock in a minimum rate at which it could sell its net receivables in Japanese yen but wanted to be able to capitalize if the yen appreciates substantially against the pound by the time payment arrives, the most appropriate hedge would be:

• A) a money market hedge.
• B) a forward sale of yen.
• C) purchasing yen call options.
• D) purchasing yen put options.
• E) selling yen put options.

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