A money market hedge on payables would involve, among others, borrowing ____ and investing in the ____.

Question

A money market hedge on payables would involve, among others, borrowing ____ and investing in the ____.​

Quizplus · Accepted Answer

A money market hedge involves borrowing in the currency in which payables are denominated and investing the proceeds in the currency of the home country. Therefore, to hedge payables denominated in a foreign currency, dollars should be borrowed and invested in the foreign country. Option C is the only choice that represents this strategy.

A Money Market Hedge on Payables Would Involve, Among Others