Question
An example of cross-hedging is: 1. obtain a forward contract to purchase a currency that is highly correlated with the currency in which the payables
An example of cross-hedging is:
1. obtain a forward contract to purchase a currency that is highly correlated with the currency in which the payables are due.
2. use the forward market to sell forward whatever currencies you will receive.
3. use the forward market to buy forward whatever currencies you will pay.
4. use the forward market to sell forward whatever currencies you will receive AND use the forward market to buy forward whatever currencies you will pay.
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Public Finance A Contemporary Application Of Theory To Policy
Authors: David N Hyman
10th Edition
053875446X, 978-0538754460
