Consider a simple exchange risk hedging strategy in which the U.S. dollar based investor sells the expected foreign currency proceeds of a risky investment forward. Although the expected foreign investment proceeds will be converted into U.S. dollars at the known forward exchange rate under this strategy, the unexpected foreign investment proceeds
A) will have to be converted into U.S. dollars at the uncertain forward spot exchange rate.
B) will have to be converted into U.S. dollars at the uncertain future spot exchange rate.
C) will have to be converted into U.S. dollars at the uncertain swap exchange rate.
D) none of the above
Correct Answer:
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A)do not register as an investment
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