If a Company Has a YEN 1 000 000 Account

question 33

Multiple Choice

If a company has a YEN 1 000 000 account receivable in three months and it expects the AUD to depreciate by the time of payment,a reasonable strategy would be to:

• A) lead the payment cash flow.
• B) borrow the present value of YEN 1 000 000 and do a money market hedge in the Australian market.
• C) enter into a forward exchange contract to sell YEN in three months' time.
• D) lag the payment cash flow.

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Definitions:

Gray Rami

Nerve fibers that connect the sympathetic ganglia to spinal nerves, conveying mostly unmyelinated postganglionic fibers.

Craniosacral

Pertaining to the cranium and sacrum, a therapeutic approach focusing on the flow of cerebrospinal fluid between these areas.

Thoracolumbar

Pertains to the thoracic (chest) and lumbar (lower back) sections of the spine.

Preganglionic Fibers

Nerve fibers that extend from the central nervous system to a ganglion in the autonomic nervous system.