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1. If you have a foreign currency denominated receivable, you can hedge with: Question 1 options: A long position in a put option. Borrow the
1. If you have a foreign currency denominated receivable, you can hedge with:
Question 1 options:
| A long position in a put option. |
| Borrow the home currency today and investing it in the foreign country. |
| A long position in a currency forward contract. |
| None of the answers is correct. |
2. Buying a currency option provides
Question 2 options:
| limits the downside risk while preserving the upside potential |
| a right, but not an obligation, to buy or sell a currency |
| All of the answers are correct. |
| a flexible hedge against exchange exposure |
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