To Hedge a Foreign Currency Receivable

question 91

Multiple Choice

To hedge a foreign currency receivable,

• A)buy call options on the foreign currency with a strike in the domestic currency.
• B)buy put options on the foreign currency with a strike in the domestic currency.
• C)sell call options on the foreign currency with a strike in the domestic currency.
• D)sell put options on the foreign currency with a strike in the domestic currency.

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Definitions:

Mast Cells

Immune cells found in connective tissue that release histamine and other substances during inflammatory and allergic reactions.

Increased Blood Flow

The condition of more blood moving through vessels in a particular area of the body, often in response to the need for more oxygen or nutrients.

Redness

A common sign of inflammation or infection, often resulting from dilation of blood vessels near the skin's surface.

Heat

A form of energy that is transferred between systems or objects with different temperatures, flowing from the higher-temperature system to the lower-temperature system.