If a Firm Is Hedging Payables with Futures Contracts, It

question 46

True/False

If a firm is hedging payables with futures contracts, it may end up paying more for the payable than it would have had it remained unhedged if the foreign currency depreciates.

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Definitions:

Subalternate

In logic, a term referring to a proposition that is inferred immediately from another more general proposition.

Proposition

A statement that can either be true or false, expressing a complete thought or judgement.

Contradictory

Refers to statements that cannot both be true at the same time because they express opposite assertions.

Real Estate Deals

Transactions or agreements made in the context of buying, selling, or leasing property.