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To hedge an accounts payable, a company could invest in the foreign currency in which the A/P needs to be paid. buy a put option
To hedge an accounts payable, a company could invest in the foreign currency in which the A/P needs to be paid. buy a put option in case the foreign currency appreciates in the future. sell a futures contract in the foreign currency. sell the foreign currency forward to the bank. Which of the following is cited as a good reason for NOT hedging currency exposures? There is information asymmetry between management and shareholders. There is an increase in expected cash flows from hedging. Average tax bill may be reduced due to more stable earnings. Shareholders are more capable of diversifying risk than management
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