Question: Your CEO routinely approves changes in the fire insurance policies of your firm to protect the value of its buildings and manufacturing equipment. Nevertheless, he

Your CEO routinely approves changes in the fire insurance policies of your firm to protect the value of its buildings and manufacturing equipment. Nevertheless, he argues that the firm should not buy foreign currency options because, he says, “We don’t speculate in FX markets!” How could you convince him that his positions are mutually inconsistent?

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