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A U.S. firm is importing goods over the next year from Australia. It pays for these goods in AUD at the time of delivery. The
A U.S. firm is importing goods over the next year from Australia. It pays for these goods in AUD at the time of delivery. The firm has internal forecasts that the AUD is expected to depreciate by more than the current forward discount against the USD. The firm has a strong belief in their forecasting ability but still wishes to hedge their risk. Which is the most appropriate hedging action to take?
Sell AUD forward | ||
Purchase an AUD put option | ||
Purchase an AUD call option | ||
None of the other options are hedges in this situation | ||
Buy AUD forward |
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