A U.S. company has customers in Singapore, who remit payments to the U.S. company in Singapore dollars. Which investment hedges the exchange risk associated with these customers?

Question

Quizplus · Accepted Answer

A forward sale in Singapore dollars allows the U.S. company to lock in a rate at which it can convert the Singapore dollars it receives into U.S. dollars, thus hedging against the risk of the Singapore dollar depreciating.

A US Company Has Customers in Singapore, Who Remit Payments to to the U.S