If a firm hedges a future purchase of euros by purchasing a call option, the firm ________ the potential cost but will benefit if the euro ________.

Name: If a firm hedges a future purchase of euros by purchasing a call option, the firm ________ the potential cost but will benefit if the euro ________.
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Question

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By purchasing a call option, the firm caps the maximum cost of purchasing euros but can still benefit if the euro appreciates, as it can buy euros at a lower price than the market rate.

If a Firm Hedges a Future Purchase of Euros by Purchasing