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Wheldon Wheels Inc. (WW) is a US-based manufacturer that imports car parts from Taiwan. WW expects to spend 20,000,000 Taiwan dollars in 90 days. Suppose
Wheldon Wheels Inc. (WW) is a US-based manufacturer that imports car parts from Taiwan. WW expects to spend 20,000,000 Taiwan dollars in 90 days. Suppose WW decides to use the options market to hedge. Which of the following should WW do? Assume that all contracts are for TWD, quoted in terms of USD (i.e., in American terms).
a. Buy Calls
b. Write Calls
c. Buy Puts
d. Write Puts
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