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:

Coordination

The process of organizing activities and resources efficiently and effectively to achieve defined goals and objectives within an organization.

Direct Contact

The immediate, face-to-face interaction or communication between individuals, without the use of intermediaries or technology.

Organization Members

Individuals who belong to and participate in the functioning of an organization, including employees, managers, and stakeholders.

Functional Departmentation

The organization of a company into departments based on functions, such as marketing, finance, and production.