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Its Sept. 2015. Division A of U.S. Toys Inc. owes 1.5 mil. C$ to a Canadian firm to be paid in February 2016, but another

  1. Its Sept. 2015. Division A of U.S. Toys Inc. owes 1.5 mil. C$ to a Canadian firm to be paid in February 2016, but another Division B of the U.S. Toys Inc. will receive 2.3 mil. C$ from a different Canadian client also in February 2016. U.S. Toys Inc. plans to transact in spot foreign exchange market to exchange US dollars and Canadian dollars (C$) in February 2016. U.S. Toys Inc. should engage in _______ hedge, hedging ______ million C$ in the futures market.

  1. Short; 0.8
  2. Long; 0.8
  3. Short; 2.3
  4. Long; 2.3
  5. Short, 1.5

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