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ABC plc has to pay a Germany supplier 90,000 euros in three months' time. The company's finance director wishes to avoid exchange rate exposure, and

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ABC plc has to pay a Germany supplier 90,000 euros in three months' time. The company's finance director wishes to avoid exchange rate exposure, and is looking at four options. 1. Do nothing for three months and then buy euros at the spot rate 2. Pay in full now, buying euros at today's spot rate 3. Buy euros now, put them on deposit for three months, and pay the debt with these euro plus accumulated interest 4. Arrange a forward exchange contract to buy the euros in three months time Which of these options would provide cover against the exchange rate exposure that ABC plc would otherwise suffer? 3 and 4 only 4 only 2,3 and 4 only 1,2,3 and 4

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