Examlex

Solved

Your Firm Will Be Importing a Large Order of Its

question 15

Multiple Choice

Your firm will be importing a large order of its inputs from the United States in three months and is concerned that the Canadian dollar might fall against the U.S.dollar over that time.To hedge your risk,you decide to enter into a currency forward contract to purchase 750,000 USD at a rate of 1.0114 CAD/USD.If the spot exchange rate in 3 months' time ends up being 1.0346 CAD/USD,what is your gain or loss from hedging compared to remaining unhedged?


Definitions:

Cash Receipts

The total amount of cash collected by a business during a specific period, including revenues and other income.

Related Questions