To hedge a foreign currency payable,
A)buy call options on the foreign currency.
B)buy put options on the foreign currency.
C)sell call options on the foreign currency.
D)sell put options on the foreign currency.

Question

Quizplus · Accepted Answer

Buying call options on the foreign currency gives the right to purchase the currency at a predetermined price, protecting against unfavorable currency movements when needing to pay a foreign currency payable.

To Hedge a Foreign Currency Payable