Assume a Japanese Firm Invoices Exports to the U

question 1

Multiple Choice

Assume a Japanese firm invoices exports to the U.S. in U.S. dollars. Assume that the forward rate and spot rate of the Japanese yen are equal. If the Japanese firm expects the U.S. dollar to ____ against the yen, it would likely wish to hedge. It could hedge by ____ dollars forward.

• A) depreciate; buying
• B) depreciate; selling
• C) appreciate; selling
• D) appreciate; buying

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Definitions:

Passive Voice

A grammatical construction where the object of an action becomes the subject of the sentence, often deemphasizing the action's performer.

Old Clientele

Refers to the established base of customers or clients who have been using a company's products or services for a long time.

New Media

Digitally-based communication platforms and technologies, such as social media, websites, and streaming services, that enable interactive user engagement.

Active Voice

A sentence structure where the subject performs the action stated by the verb, emphasizing the action and the doer.