Assume zero transaction costs. If the 90-day forward rate of the euro – McqOptions

MCQOPTIONS

1.	Assume zero transaction costs. If the 90-day forward rate of the euro is an accurate estimate of the spot rate 90 days from now, then the real cost of hedging payables will be:
A.	positive.
B.	negative.
C.	positive if the forward rate exhibits a premium, and negative if the forward rate exhibits a discount.
D.	zero.
Answer» E.

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