Which of the Following Is the Most Likely Strategy for a U.S

question 123

Multiple Choice

Which of the following is the most likely strategy for a U.S. firm that will be receiving Swiss francs in the future and desires to avoid exchange rate risk (assume the firm has no offsetting position in francs) ?

• A) purchase a call option on francs.
• B) sell a futures contract on francs.
• C) obtain a forward contract to purchase francs forward.
• D) all of the above are appropriate strategies for the scenario described.

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