Hiring locally and borrowing local funds are ways to hedge country risk.

a$.$ True

b$.$ False

A buyer of a call option with a strike price of $$\frac{1\mathrm{.}85}{2}$ would be

if the spot

exchange rate is $$\frac{1\mathrm{.}86}{2}.$

A$)$ In the money

B$)$ At the money

C$)$ Out of the money

I am expecting to pay a foreign debt $(*)$ in $3$ months. If I enter into a forward contract to

sell w$,$ this would hedge my exchange rate risk.

A$)$ True

B$)$ False

Transaction costs causes the IRP have a range of no arbitrage being possible.

a$.$ Wider

b$.$ Narrower

In the graph of the $2,$ in increasing periods there was a $,$bias and in decreasing

periods there was a bias.

a$.$ Upward, downward

b$.$ Downward, downward

c$.$ Upward, upward

d$.$ Downward, upward

You could use

if you expected the underlying currency was going to have

high volatile.

A$)$ Long straddle

B$)$ Short straddle

C$)$ Long strangle

D$)$ Short strangle

E$)A+B$

F$)A+C$

G$)A+D$

H$)B+C$

D$)B+D$

J$)C+D$