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Currency risk management techniques include forward hedges, money market hedges, etc. Draw a diagram showing the possible outcomes of these hedging alternatives for a foreign
Currency risk management techniques include forward hedges, money market hedges, etc. Draw a diagram showing the possible outcomes of these hedging alternatives for a foreign currency receivable contract. In your diagram, be sure to label the X and Y-axis, and show the possible results for a money market hedge, a forward hedge, and an uncovered position. (Note: Assume the forward currency receivable is British pounds and the forward rate is $1.52/ and the current spot rate is $1.48/.
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