Which of the Following Reflects a Hedge of Net Payables

question 17

Multiple Choice

Which of the following reflects a hedge of net payables on British pounds by a U.S. firm?

• A) purchase a currency put option in British pounds.
• B) sell pounds forward.
• C) sell a currency call option in British pounds.
• D) borrow U.S. dollars, convert them to pounds, and invest them in a British pound deposit.
• E) A and B

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Definitions:

Radial

Pertaining to the radius bone in the forearm or relating to structures that are located near or radiate from a central point.

Sciatic Nerve

Tibial and common peroneal nerves bound together; also called ischiadic nerve.

Tibial Nerve

A nerve in the lower leg that is a branch of the sciatic nerve, responsible for innervating parts of the lower leg and foot.

Common Fibular Nerve

The common fibular nerve, known also as the common peroneal nerve, is a branch of the sciatic nerve that innervates the lower leg, particularly muscles that control foot eversion and dorsiflexion.