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

question 115

Multiple Choice

Which of the following is the most unlikely strategy for a U.S. firm that will be purchasing 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) obtain a forward contract to purchase francs forward.
• C) sell a futures contract on francs.
• D) all of the above are appropriate strategies for the scenario described.

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Definitions:

Bills of Lading

Official documents issued by a carrier to acknowledge receipt of cargo for shipment, detailing the terms of the carriage.

Negotiable

Capable of being bought, sold, or transferred to another party through endorsement or delivery.

Regulation of Insurance

The oversight and control of insurance practices and policies by government agencies to ensure fairness, solvency, and market stability.

Warranties

Legally binding promises or guarantees about the condition, quality, or performance of a product or service.