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Don't have to show work Suppose you have payables due in South African Rand (ZAR). You are thus concerned with a strengthening Rand during the
Don't have to show work
Suppose you have payables due in South African Rand (ZAR). You are thus concerned with a strengthening Rand during the period of time until the customer pays. Suppose further that you expect the Rand to strengthen during the payables period. Which of the following would NOT be advisable if you wish to hedge your payables? Adopt a Leading payment strategy Adopt a Lagging payment strategy Construct a Money Market Hedge by making an investment in the South African Money Market Purchase Call Options to cover your payables Which of the following is true regarding a Put Option Hedge on Receivables? O You will guarantee the MINIMUM amount of USD received You will guarantee the MAXIMUM amount of USD received O The outcome of your hedge will be known at time you purchase the put options You can be sure that the Put Option Hedge is a better strategy than a Forward Hedge Suppose a country has a positive Net International Investment Position (NIIP). Only based upon this fact, in a floating currency system you would expect that country's currency to over time. Weaken Remain Unchanged Strengthen KO NIIP has no impact on currency movements Step by Step Solution
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