1.

If a firm based in the Netherlands wishes to avoid the risk of exchange rate movements, andis due to receive USD100,000 in 90 days, it could:

A. sell US dollars 90 days from now at the spot rate.
B. enter into a 90-day forward sale of US dollars for euros;
C. purchase US dollars 90 days from now at the spot rate;
D. enter into a 90-day forward purchase of US dollars for euros;
Answer» C. purchase US dollars 90 days from now at the spot rate;


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