A US company knows it will have to pay 3 million euros in three months The current exchange rate is 1 4500 dollars per euro Discuss how forward and options contracts can be used by the company to hedge its exposure ...

The company could enter into a forward contract obligating it t ...

A US company knows it will have to pay 3 million euros in three months. The current

Question:

A US company knows it will have to pay 3 million euros in three months. The current is 1.4500 dollars per euro. Discuss how forward and options contracts can be used by the company to hedge its exposure.
Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...