Your firm is a U.K.-based exporter of bicycles. You have sold an order to a Swiss firm for SFr. 1,000,000 worth of bicycles. Payment from the Swiss firm (in Swiss francs) is due in 12 months. Detail a strategy using futures contracts that will hedge your exchange rate risk. Have an estimate of how many contracts of what type and maturity. 
A) Go short 100 12-month Swiss franc futures contracts; and long 50 12-month pound futures contracts.
B) Go long 100 12-month Swiss franc futures contracts; and short 50 12-month pound futures contracts.
C) Go short 100 12-month Swiss franc futures contracts; and short 50 12-month pound futures contracts.
D) Go long 100 12-month Swiss franc futures contracts; and long 50 12-month pound futures contracts.
E) None of the above
Correct Answer:
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Q31: Your firm is a U.K.-based importer of
Q32: Your firm is a U.K.-based exporter of
Q33: Your firm is a Swiss importer of
Q34: Your firm is an Italian exporter of
Q35: Your firm is a U.S.-based exporter of
Q37: Your firm is a Swiss exporter of
Q38: Your firm is a U.K.-based importer of
Q39: Your firm is an Italian exporter of
Q40: Your firm is a Swiss exporter of
Q41: A Japanese IMPORTER has a €1,000,000 PAYABLE
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