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Suppose Dell is selling 50,000 units in Europe at an average price of 2,000 per unit. Its costs are $2,000 per unit. Now consider a
Suppose Dell is selling 50,000 units in Europe at an average price of 2,000 per unit. Its costs are $2,000 per unit. Now consider a 10% fall in the Euro from $1.20/ to $1.08/C Assume zero passthrough (i.e., Dell's sale prices in Euro remain the same at 2,000 per unit and sales volume remains to be 50,000 units) Which of the following would effectively hedge Dell's dollar profit exposure? O Sell 100 million in the forward market O Buy 100 million in the forward market O Sell 16.7 million in the forward market Sell 7.4 million in the forward market
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