Your firm is an italian importer of bicycles you have

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7. Your firm is an Italian importer of bicycles. You have placed an order with a British firm for £1,000,000 worth of bicycles. Payment (in pounds sterling) is due in 12 months. Detail a strategy using futures contracts that will hedge your exchange rate risk. Have an estimate of how many contracts of what type and maturity.A. Go long 100 12-month pound futures contracts; and long 125 12-month euro futures contractsB. Go short 100 12-month pound futures contracts; and short 125 12-month euro futures contractsC.Go long 100 12-month pound futures contracts; and short 125 12-month euro futures contractsD. Go short 100 12-month pound futures contracts; and long 125 12-month euro futures contracts.E. None of the above
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8. Your firm is a U.K.-based exporter of bicycles. You have sold an order to a French firm for €1,000,000 worth of bicycles. Payment from the French firm (in euro) is due in 12 months. Use a money market hedge to redenominate this one-year receivable into a pound-denominated receivable with a one-year maturity.The following were computed without rounding. Select the answer closest to yours.
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9. Your firm is a Swiss importer of bicycles. You have placed an order with an Italian firm for €1,000,000 worth of bicycles. Payment (in euro) is due in 12 months. Use a money market hedge to redenominate this one-year receivable into a Swiss franc-denominated receivable with a one-year maturity.The following were computed without rounding. Select the answer closest to yours.
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10. Your firm is a U.K.-based exporter of bicycles. You have sold an order to a Swiss firm for SFr. 1,000,000 worth of bicycles. Payment from the Swiss firm (in Swiss francs) is due in 12 months. Use a money market hedge to redenominate this one-year receivable into a euro-denominated receivable with a one-year maturity.The following were computed without rounding. Select the answer closest to yours.

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