Your firm,which operates in the United States,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
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