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A US importer has arranged to purchase goods costing 157,895 Yuan from a Chinese exporter, and will sell those goods for a guaranteed price of

A US importer has arranged to purchase goods costing 157,895 Yuan from a Chinese exporter, and will sell those goods for a guaranteed price of $1,325,000. The goods will be delivered immediately, but the importer will not pay for the goods for 30 days. What potential problem or problems will be introduced if the importer uses the options market to eliminate the foreign exchange risk?

a.

Commitment

b.

Both regret and commitment

c.

Both regret and arbitrage

d.

Arbitrage

e.

Regret

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