AU.S. company expects to get paid 1 million Canadian dollars in six months. Explain how the exchange rate risk can be hedged using a forward contract O a. The company could enter into a short forward contract to sell 1 million Canadian dollars in six months. This would have the effect of locking in an exchange rate equal to the spot exchange rate Ob. The company could enter into a long forward contract to buy 1 millioh Canadian dollars in six months. This would have the effect of locking in an exchange rate equal to the current forward exchange rate O c. None of the options O d. The company could enter into a long forward contract to sell 1 million Canadian dollars in six months. This would have the effect of locking in an exchange rate equal to the current forward exchange rate

A US. compary expects to pet paid 1 milfion Canadian dollars in six months. Explain how the exchange rate risk can be hedged using a forrard contract a. The company could eoter into a short forward coneract to sell 1 milion Canadian dolars in six monens. This would have the effect of locking in an auchunge rate squal to the spot exchange rate b. The company could enter into a long forward contract to buy 1 milich Canadian dolars in six months. This would have the effect of locking in an machange rate squal to the curtent forward exchange rate CNone of the options d. The company could enter into a long forward contract to sell 1 milion Canadian doltars in six months. This would have the elfect of locking in an wachange rale equal to the cument forward exchange rave