With any hedge a your losses on one side should about

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9) With any hedge, A.your losses on one side should about equal your gains on the other side.B.you should try to make money on both sides of the transaction; that way you make money coming and going.C.you should spend at least as much time working the hedge as working the underlying dealitself.D.you should agree to anything your banker puts in front of your face. 10) With any successful hedge, 11) The choice between a forward market hedge and a money market hedge often comes down to 12) Since a corporation can hedge exchange rate exposure at low cost
13) A CFO should be least worried about A.transaction exposure.B.translation exposure.C.economic exposure.D.none of the options 14) Exchange rate risk of a foreign currency payable is an example of 15) A stock market investor would pay attention to 16) Suppose that Boeing Corporation exported a Boeing 747 to Lufthansa and billed €10 million payable in one year. The money market interest rates and foreign exchange rates are given as follows:Assume that Boeing sells a currency forward contract of €10 million for delivery in one year, in exchange for a predetermined amount of U.S.dollars. Which of the following is/are true? On the maturity date of the contract Boeing will(i)have to deliver €10 million to the bank (the counter party of the forward contract).(ii)take delivery of $14.6 million(iii)have a zero net euro exposure(iv)have a profit, or a loss, depending on the future changes in the exchange rate, from this British sale.

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