Your U.S. firm has a £100,000 payable with a 3-month maturity. Which of the following will hedge your liability?
A) Buy the present value of £100,000 today at the spot exchange rate, invest in the U.K. at i£.
B) Buy a call option on £100,000 with a strike price in dollars.
C) Take a long position in a forward contract on £100,000 with a 3-month maturity.
D) All of the above
Correct Answer:
Verified
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