A U.S. bank is owed $10 million in interest from the Mexican government organization in 90 days. What is the more likely action taken by a currency risk manager?
A) The Mexican manager will sell U.S. dollars in a 90-day forward contract.
B) The U.S. bank will buy peso in a 90-day forward contract.
C) The Mexican manager will buy U.S. dollars in a 90-day forward contract.
D) The Mexican manager will buy a peso 90-day forward contract.
Correct Answer:
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