If a Corporation Hedges Payables with Currency Call Options, It

question 13

Multiple Choice

If a corporation hedges payables with currency call options, it will ____ if the value of the foreign currency is ____ than the exercise price when the payables are due.

• A)exercise the option; greater
• B)exercise the option; lower
• C)let the option expire; greater
• D)let the option expire; lower
• E)exercise the option; greater AND let the option expire; lower

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Definitions:

Work Assignments

Tasks or projects designated to individuals or groups as part of their job responsibilities or roles.

Functional Operating Team

A group of individuals organized around specific tasks or functions, working together efficiently towards common objectives.

Specialized

Having a particular area of expertise or concentrating on a specific subject, occupation, activity, or field of study.

Basic Function

The fundamental purpose or role that an entity or process serves in a system or organization.