Which of the Following Reflects a Hedge of Net Payables

question 29

Multiple Choice

Which of the following reflects a hedge of net payables on British pounds by a U.S. firm?

• A) purchase a currency put option in British pounds.
• B) sell pounds forward.
• C) sell a currency call option in British pounds.
• D) borrow U.S. dollars, convert them to pounds, and invest them in a British pound deposit.
• E) A and B

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Definitions:

Ligaments

Strong, fibrous tissues that connect bones to other bones, providing stability and support to joints.

Tendons

Tough, flexible bands of fibrous tissue that connect muscles to bones, transmitting the force necessary to move the bone.

Muscles

Tissues in the body that have the ability to contract, enabling movement.

Identifiable Cause

A specific, known reason or factor that leads to a condition or event.