Assume a U

question 74

Multiple Choice

Assume a U.S. firm has to pay for Korean imports in 60 days. It expects that Korean won will depreciate, but it still wants to hedge its risk. What type of hedging is more appropriate in this situation:

• A) Buy dollars forward
• B) Sell dollars forward
• C) Purchase call option
• D) Purchase put option

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Definitions:

Problem Solving

The process of identifying a problem, finding possible solutions, and choosing and implementing the best solution.

Right-Handed

The preference of using the right hand for tasks such as writing and handling most tools or objects, exhibited by the majority of people.

Left Hemisphere

The half of the human brain that is typically associated with analytical tasks, language processing, and logical reasoning.

Brain Plasticity

The brain's ability to change and adapt as a result of experience, including the development of new neural connections.