Buying a currency option provides a flexible hedge against exchange exposure. limits the downside risk while preserving the upside potential. a right, but not an obligation, to buy or sell a currency. all of the above Question 4 A Japanese IMPORTER has a $1,250,000 PAYABLE due in one year. Detail a strategy using forward contracts that will hedge his exchange rate risk. Spot exchange rate =$1.00==100 1- year Froward rate: $1.00=120 (contract size: 12,500,000 ) Go short in 12 yen forward contracts. Go long in 12 yen forward contracts. Go short in 16 yen forward contracts. None of the above