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If a US firm has continuing export sales to Canada and invoices all export sales in Canadian dollars. To hedge the endless series of transaction
If a US firm has continuing export sales to Canada and invoices all export sales in Canadian dollars. To hedge the endless series of transaction exposures the US firm could I. continually hedge with forwards or other contractual agreements. II. hedge by requiring debt denominated in Canadian dollars III. seek out potential suppliers of raw materials or components in US as a substitute for Canada or other foreign firms. IV. engage in currency switching, in which the company would pay foreign suppliers with Canadian dollars. I only I and II only II and III only IV only I, II and IV
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