Your firm, which operates in Canada and has a contractual payment of £1 million due in three months.Which of the following methods would be considered speculative regarding your exchange-rate risk?
A) Buy 1 million pounds now at the current spot rate.
B) Buy 1 million pounds in three months at the current spot rate.
C) Contract forward to buy 1 million pounds in three months.
D) Borrow Dollars, convert to pounds at spot, invest for three months.
Correct Answer:
Verified
Q43: If you are a currency speculator,you will
Q48: Current one-year interest rates are 4% and
Q50: If managers intend to adjust the projections
Q51: If the spot indirect exchange rate of
Q54: How much would you expect to receive
Q55: The ratio of expected spot rate to
Q56: If the exchange rate of German marks/Canadian
Q57: What is the expected German inflation rate
Q58: You are importing TV sets worth ¥10,000,000
Q99: On average,empirical evidence suggests that those who
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents