MCQOPTIONS
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MCQOPTIONS
| 1. |
Which of the following are rules to use when choosing between forward contracts and currency options: |
| A. | When the quantity of a foreign-currency cash outflow is known, buy the currency forward. |
| B. | When the quantity of a foreign-currency cash outflow is unknown, buy the currency forward. |
| C. | When the quantity of a foreign-currency cash flow is partially known and partially uncertain, use a forward contract to hedge the known and unknown portions. |
| D. | When the quantity of a foreign-currency cash inflow is known, buy the currency forward. |
| Answer» B. When the quantity of a foreign-currency cash outflow is unknown, buy the currency forward. | |