How can a currency futures contract be used as a hedge against a potentially dramatic appreciation of a foreign currency that a U.S. company is expecting to convert into U.S. dollars?
A) The U.S. company should sell the foreign currency using futures contracts.
B) The U.S. company should buy more foreign currency futures contracts than it should sell.
C) The U.S. company should buy the foreign currency using futures contracts.
D) This is a standard business situation that would be favorable if it were to happen, so no hedge is needed.
Correct Answer:
Verified
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