Question $10/15$ points

Which of the following options is not true regarding purchase obligations and operational hedging?

Question options:

A purchase obligation is more similar to a futures than to a forward contract.

Purchase obligations are specially useful for inputs that do not trade on futures markets.

Operational hedging refers to a change in operations that is done with the purpose of managing risks, such as moving production abroad to manage currency risk.

All of the above are correct.

Question $20/15$ points

A U$.$S$.$ company's financial planning model has pointed out that it will need to borrow $35$ million dollars in the end of the year. The company plans to issue a bond to raise this cash. Which of the following is not true?

Question options:

The company faces exchange rate risk because dollar may appreciate in the next year.

The company can hedge interest rate risk by locking in a bond coupon rate using interest rate futures.

The company can hedge interest rate risk by issuing the bond today and paying a dividend to shareholders.

All of the above are incorrect