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A shoe factory in China produces shoes for Nike. Its costs are in CNY, and revenue in USD. Does the owner worries about USD depreciating
A shoe factory in China produces shoes for Nike. Its costs are in CNY, and revenue in USD. Does the owner worries about USD depreciating or appreciating against CNY? How should the owner use exchange rate futures to hedge?
A. The owner worries about USD depreciating; should long the USD/CNY future
B. The owner worries about USD depreciating; should short the USD/CNY future
C. The owner worries about USD appreciating; should long the USD/CNY future
D. The owner worries about USD appreciating; should short the USD/CNY future
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The Economics Of Money Banking And Financial Markets
Authors: Frederic S. Mishkin
9th Edition
0321598903, 978-0321598905
