The Steps Involved in a Money Market Hedge for a Foreign

question 19

Multiple Choice

The steps involved in a money market hedge for a foreign currency payable of a Canadian firm are in order:

• A) Borrow Canadian dollars, buy foreign currency spot, invest in foreign currency T-bills, pay foreign currency payable
• B) Borrow Canadian dollars, buy foreign currency spot, invest in Canadian T-bills, pay foreign currency payable
• C) Borrow foreign currency, buy dollar spot, invest in foreign currency T-bills, collect foreign currency proceeds
• D) Borrow foreign currency, buy dollar spot, invest in Canadian T-bills, collect foreign currency proceeds

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Definitions:

Oral Language

The system of spoken communication used by a particular community or country.

Sign Language

A language that uses manual communication and body language to convey meaning, used primarily by the deaf and hard of hearing.

Broca's Area

A region in the frontal lobe of the dominant hemisphere (usually the left) of the brain linked to speech production.

Wernicke's Area

A region in the brain's temporal lobe associated with the understanding of spoken language.