Which of the Following Reflects a Hedge of Net Payables

question 29

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

---

Definitions:

Income

Payments regularly received for work done or money invested.

Prices

The amount of money required to purchase a good or service, indicating the value placed on it by the market.

Preferences

In economics, this refers to the subjective tastes and likes of individuals, which influence their choices among various goods and services.

Prices

The financial amount expected, required, or supplied as remuneration for an item.