24 Forward versus options hedge on receivables. You are an exporter of goods to the United States...

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24 Forward versus options hedge on receivables.

You are an exporter of goods to the United States and you believe that today’s forward rate of the US dollar substantially underestimates the future spot rate. Company policy requires you to hedge your dollar receivables in some way. Would a forward hedge or a put option hedge be more appropriate?

Explain.

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Exploring Economics

ISBN: 9780324395464

4th Edition

Authors: Robert L. Sexton

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