Question
If a US-based company that imports and exports goods, is expecting to receive a sales proceeds/cash inflow amount of JPY 3,580,000 and the transaction date
If a US-based company that imports and exports goods, is expecting to receive a sales proceeds/cash inflow amount of JPY 3,580,000 and the transaction date is said to be on November 22, 2022
Taking into consideration, that there are many different hedging strategies that exist to manage foreign exchange risks and currency risks,
How much will the cash inflow/sales proceeds of the company be (in USD) if they choose to:
1. Remain unhedged
2. Use Money Market Hedge
3. Use currency derivatives such as futures to hedge
4. Use currency derivatives such as forwards to hedge (Forward Hedge)
5. Use currency derivatives such as options to hedge
6. Hedge using currency swaps
Also, after using different hedging techniques and after having done the calculations in terms of the different cash inflow/sales proceeds of the company (in USD) given the different hedging strategies, which of the above hedging strategies is the best choice for the company to undertake and why is it the best choice?
Note - For the calculations using different hedging strategies, kindly include screenshots from where the used accurate rates were taken from, as well as website links for any and all sources of secondary data and information
Thanks
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