On March 1,1998,Bechtel Submits a Franc-Denominated Bid on a Project

question 10

Multiple Choice

On March 1,1998,Bechtel submits a franc-denominated bid on a project in France.Bechtel will not learn until June 1 whether it has won the contract.What is the most appropriate way for Bechtel to manage the exchange risk on this contract?

• A)sell the franc amount of the bid forward for U.S.dollars
• B)buy French francs forward in the amount of the contract
• C)buy a put option on francs in the amount of the franc exposure
• D)sell a call option on francs in the amount of franc exposure

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Definitions:

Anxious Attachment

A type of attachment characterized by intense worry about being abandoned and a desire to be close to others, often resulting in clingy or dependent behavior.

Romance

A feeling of excitement and mystery associated with love, often involving a romantic relationship between people.

Insecurely Attached

Insecurely attached refers to a type of attachment style where individuals have difficulty forming secure and trusting relationships, often due to inconsistent caregiving in early life.

Narcissism

A personality trait characterized by an inflated sense of self-importance, a deep need for excessive attention and admiration, and a lack of empathy for others.