Examlex

Solved

A US FI Wishes to Hedge a €10 000 000

question 21

Multiple Choice

A US FI wishes to hedge a €10 000 000 loan using euro currency futures.Each euro futures contract is for €125 000, and the hedge ratio is 1.40.The loan is payable in one year in euros.What type of currency hedge is necessary to protect the FI from exchange rate risk?


Definitions:

Superfund

A program established to fund the cleanup of sites contaminated with hazardous substances and pollutants.

Environmental Protection Agency

A governmental organization responsible for the regulation of activities to protect human health and the environment by enforcing laws related to air and water quality and hazardous waste.

Solid Waste

Non-liquid, non-soluble materials ranging from municipal garbage to industrial wastes that contain complex, sometimes hazardous, substances.

Hazardous

Refers to materials or conditions that pose potential danger or risk to health, safety, or the environment.

Related Questions