A U.S. company has suppliers in Singapore, who require payment in Singapore dollars. Which investment hedges the exchange risk associated with these suppliers?

Question

Quizplus · Accepted Answer

A forward purchase in Singapore dollars allows the U.S. company to lock in the exchange rate for a future date, effectively hedging against the risk of the Singapore dollar appreciating against the U.S. dollar.

A US Company Has Suppliers in Singapore, Who Require Payment in in Singapore