US Firm Submitted a Fixed Bid for a Euro Multimillion

question 11

Multiple Choice

US firm submitted a fixed bid for a Euro multimillion project in Ukraine. The contract will be awarded in 12 months and the company knows there will be no advance payments. The company

• A) should pay the premium for a 3 months put currency option to hedge the quotation exposure.
• B) should write 3 months put currency option, receive the premium and roll it forward.
• C) should buy 12 months put option and limit the loss to the premium amount if the bid gets rejected.
• D) should get 1 year Euro denominated loan equal to the bid amount.

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Definitions:

Certified Checks

Checks guaranteed by a bank, verifying that the signature is genuine and that the check writer has sufficient funds in their account.

Day Of Deposit

The day on which funds are deposited into a bank account, which starts the process of the funds being cleared and made available for use.

Multiple Forgeries

The act of falsifying or making unauthorized copies of documents, signatures, or artworks on more than one occasion.

Altered Checks

Checks that have been tampered with or modified unauthorizedly, affecting the intended payment amount or recipient.