HEDGING IN GENERAL Explain the relationship between hedging (discussed in this chapter) and measuring exposure (discussed in Chapter 10).

MONEY MARKET HEDGE ON RECEIVABLES Assume that Stevens Point Co. has net receivables of 100,000 Singapore dollars in 90 days. The spot rate of the Singapore dollar is $0.50 , and the Singapore interest rate is 2 percent over 90 days. Suggest how the U.S. firm could implement a money market hedge. Be precise.

MONEY MARKET HEDGE ON PAYABLES Assume that Hampshire Co. has net payables of 200,000 Mexican pesos in 180 days. The Mexican interest rate is 7 percent over 180 days, and the spot rate of the Mexican peso is $0.10 . Suggest how the U.S. firm could implement a money market hedge. Be precise.

NET TRANSACTION EXPOSURE Why should an MNC identify net exposure before hedging?

HEDGING WITH FUTURES Explain how a U.S. corporation could hedge net receivables in euros with futures contracts. Explain how a U.S. corporation could hedge net payables in Japanese yen with futures contracts.