From the perspective of Detroit Co., which has payables in Mexican pesos, hedging the payables is especially beneficial if the expected real cost of hedging the payables is:
A) negative.
B) zero.
C) positive and large.
D) positive and small.

Question

Quizplus · Accepted Answer

If the expected real cost of hedging the payables is negative, it means Detroit Co. would effectively save money or gain from the hedging process, making it especially beneficial.

From the Perspective of Detroit Co