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A Japanese corporation exports goods to Australia and expects to receive payment in Australian dollars in three months. To mitigate the risk of a weakening
A Japanese corporation exports goods to Australia and
expects to receive payment in Australian dollars in three
months. To mitigate the risk of a weakening Australian
dollar, the corporation can use a forward contract. What is
the primary purpose of using aforward contract in this
scenarie?
Maximizing profit fromfavorable market trends
OHedging. against exchange rate fluctuations
Minimizing credit risk
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