A Firm in Canada Is Due to Receive Payment of 1

question 28

Essay

A firm in Canada is due to receive payment of 1 million Australian Dollars in 10 year's time.It would like to protect itself against a decline in the value of the Australian Dollar but finds it difficult to arrange a forward sale for such a long period.Is there any other way that it can protect itself?

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Definitions:

Moving Averages

A method used in technical analysis that smooths out price data by creating a constantly updated average price over a specific time period.

Trend Indicators

Technical analysis tools used to identify and follow the direction of market or asset price trends.

Moving Average

A statistical measure used in analyzing time series data, specifically to smooth out short-term fluctuations and highlight longer-term trends.

Market Momentum

The tendency of a market to continue moving in a particular direction over time, often influenced by investor sentiment and recent price trends.