Scenario: ABC Software
ABC Software is a producer of educational software for small children. The company has operations in Switzerland and would like to expand its foreign production with a new facility in China.
-If ABC Software holds a currency option to purchase Swiss francs at SF1.67/$ in 30 days and at the end of the 30 days, the exchange rate is SF1.70/$, ABC Software ________.
A) is required to follow through with a currency exchange
B) would exercise its currency option
C) has failed to hedge against exchange rate risk
D) would not exercise its currency option
Correct Answer:
Verified
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