ICF Week 4 Managing transaction Exposure

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Question 1 of 1

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459803

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Assume zero transaction costs. If the 90-day forward rate of the euro is an accurate estimate of the spot rate 90 days from now, then the real cost of hedging payables will be

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459810

120

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An example of cross-hedging is

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459811

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If Lazer ltd. desired to lock in the maximum it would have to pay for its net payables in euros but wanted to be able to capitalize if the euro depreciates substantially against the pound by the time payment is to be made, the most appropriate hedge would be:

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459812

120

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The real cost of hedging payables with a forward contract equals:

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459814

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Foghat Co. has 1,000,000 euros as receivables due in 30 days, and is certain that the euro will depreciate substantially over time. Assuming that the firm is correct, the ideal strategy is to:

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459816

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A ____ involves an exchange of currencies between two parties, with a promise to re-exchange currencies at a specified exchange rate and future date.

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459818

120

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

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459820

120

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If a Salerno plc desired to lock in a minimum rate at which it could sell its net receivables in Japanese yen but wanted to be able to capitalize if the yen appreciates substantially against the pound by the time payment arrives, the most appropriate hedge would be

ICF Week 4 Managing transaction Exposure

Question 1 of 1

Time Left

Assume zero transaction costs. If the 90-day forward rate of the euro is an accurate estimate of the spot rate 90 days from now, then the real cost of hedging payables will be

Select the correct answer(s).

(0/0)

An example of cross-hedging is

Select the correct answer(s).

(0/0)

If Lazer ltd. desired to lock in the maximum it would have to pay for its net payables in euros but wanted to be able to capitalize if the euro depreciates substantially against the pound by the time payment is to be made, the most appropriate hedge would be:

Select the correct answer(s).

(0/0)

The real cost of hedging payables with a forward contract equals:

Select the correct answer(s).

(0/0)

Foghat Co. has 1,000,000 euros as receivables due in 30 days, and is certain that the euro will depreciate substantially over time. Assuming that the firm is correct, the ideal strategy is to:

Select the correct answer(s).

(0/0)

A ____ involves an exchange of currencies between two parties, with a promise to re-exchange currencies at a specified exchange rate and future date.

Select the correct answer(s).

(0/0)

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

Select the correct answer(s).

(0/0)

If a Salerno plc desired to lock in a minimum rate at which it could sell its net receivables in Japanese yen but wanted to be able to capitalize if the yen appreciates substantially against the pound by the time payment arrives, the most appropriate hedge would be

Select the correct answer(s).

(0/0)

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