Question
Need some direction !!!!!! A derivative is an innovative security designed to minimize a specific risk. There are many types of derivatives used to mitigate
Need some direction !!!!!!
Aderivativeis an innovative security designed to minimize a specific risk. There are many types of derivatives used to mitigate risks, including options, swaps, futures, and forwards.
An airplane manufacturer in Seattle is building a new type of 747 airplane, and an airline in Spain is first in line to buy the new model. They negotiate a price of $100 million in January, and the plane should be delivered by September. In this scenario, how can the manufacturer use a financial derivative to minimize its currency risk exposure?
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