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please show work, explain the steps. ..................................................................................................................................................... Company 2 You work in the finance division of a company based in the United States. You have

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please show work, explain the steps.

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Company 2 You work in the finance division of a company based in the United States. You have a large bond issued to European investors, and your interest payment is due in one year. Since you issued this bond in Europe, the bond and its interest payments are denominated in Euros. Suppose you wanted to assure yourself right now of the amount of U _S_ dollars that you would have to pay one year from now when this interest payment is due. What specific hedging instruments can you consider to implement this, and what are the strengths/benefits of each? More concretely, suppose that this is an interest payment of Euros that will becoming due. What are you going to buy/sell in order to hedge out the currency risk of the Euro interest payment?

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