Balance sheet hedge requires an equal amount of exposed foreign currency assets and liabilities. A German company's subsidiary in Poland has Zloty as its functional currency. To hedge its translational exposure the company should
A) issue 10 year Eurobond guaranteed by the parent matching the amount of subsidiary's assets.
B) obtain 5 year zloty loan in Poland.
C) start rolling over 1 year forward contracts.
D) start rolling over 3 month zloty loans, repatriate and convert the proceeds in euro.

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The Answer of Balance sheet hedge requires an equal amount of exposed foreign currency assets and liabilities. A German company's subsidiary in Poland has Zloty as its functional currency. To hedge its translational exposure the company should
A) issue 10 year Eurobond guaranteed by the parent matching the amount of subsidiary's assets.
B) obtain 5 year zloty loan in Poland.
C) start rolling over 1 year forward contracts.
D) start rolling over 3 month zloty loans, repatriate and convert the proceeds in euro.

Balance Sheet Hedge Requires an Equal Amount of Exposed Foreign