question archive 1) Bus536 Corp wants to hedge its payables in Japanese Yen by the time payables are due
1) Bus536 Corp wants to hedge its payables in Japanese Yen by the time payables are due
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1) Bus536 Corp wants to hedge its payables in Japanese Yen by the time payables are due. Bus536 Corp should:
a, purchase Yen put options.
b, sell Yens forward.
c, purchase Yen call options.
d, sell Yen call options.
2,An MNC will likely to borrow less in a foreign currency if
a, it is expecting the foreign currency to depreciate
b, it is expecting the foreign currency to appreciate
c, the foreign currency exchange rate remains unchanged
d, interest rate domestically is higher than the interest rate in the foreign country
3,Which of the following provides a perfect hedge to transaction exposure?
a, Currency options
b, Forwards
c, Money markets
d, None of the above
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1.) c. purchase Yen call options.
2.) b. it is expecting the foreign currency to appreciate
3.) b. Forwards
