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upward; more downward; more Question 17 Consider the exchange rate between Canadian dollars and Mexican pesos . Assume the income level in Mexico rises while
upward; more downward; more Question 17 Consider the exchange rate between Canadian dollars and Mexican pesos . Assume the income level in Mexico rises while the income level in Canada remains constant. Then (1) The demand for Canadian dollars (2) The supply for Mexican pesos 13) Consequently, the Canadian dollar w shifting the demand curve of Canadian dollars to the , shifting the supply curve of Mexican pesos to the against Mexican pesos. increases; right (outward); increases, right (outward); appreciate decreases; left (inward); increase, right (outward); depreciate increases; right (outward); increases, right (outward); depreciate decreases; right (outward); decreases, left (inward); appreciate Please use the following information for the next two questions, Pandora corporation (a U.S. based multinational corporation) would like to use currency options to hedge a 66.500 euro payable due on December 15th, 2020. Both currency put options and call options have the premium of $.05 (per unit of euro) and the exercise price of $1.55 per euro. Question 18 What action should Pandora corporation take to hedge its euro payable if it uses currency options? Buy currency call options on euros. 95% arch
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