Answered step by step
Verified Expert Solution
Question
1 Approved Answer
If a US company wants to hedge a prospective loss in a foreign entity investment from a foreign currency fluctuation, which of the following actions
If a US company wants to hedge a prospective loss in a foreign entity investment from a foreign currency fluctuation, which of the following actions is recommended:
A. The US company should purchase a forward to swap currency of the foreign entity's local currency for US currency. B. The US company should purchase a call option to buy currency of the foreign entity's local country. C. The US company should issue a loan to the foreign entity's local bank. D. The US company should borrow from the foreign entity's local bank.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started