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A firm known as Monaco Inc contracted to sell two machines to a German customers for 80,000 EUR each. The customer is expected to pay
A firm known as Monaco Inc contracted to sell two machines to a German customers for 80,000 EUR each. The customer is expected to pay in 4 months. How would you hedge this exposure? Explain why the hedging strategy you propose works. Would you consider this foreign exchange rate exposure to be primarily transaction, operational or tranlation exposure? Why?
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