7. Your firm is an Italian exporter of bicycles. You have sold...
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Finance
7.
Your firm is an Italian exporter of bicycles. You have sold an order to a British firm for 1,000,000 worth of bicycles. Payment from the customer (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. Multiple Choice Go short 100 12-month pound futures contracts; and long 125 12-month euro futures contracts. Go short 100 12-month pound futures contracts; and short 125 12-month euro futures contracts. none of the options Go long 100 12-month pound futures contracts; and long 125 12-month euro futures contracts. Go long 100 12-month pound futures contracts; and short 125 12-month euro futures contracts
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Your firm is an Italian exporter of bicycles. You have sold an order to a British firm for 1,000,000 worth of bicycles. Payment from the customer (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. Multiple Choice Go short 100 12-month pound futures contracts; and long 125 12-month euro futures contracts. Go short 100 12-month pound futures contracts; and short 125 12-month euro futures contracts. none of the options Go long 100 12-month pound futures contracts; and long 125 12-month euro futures contracts. Go long 100 12-month pound futures contracts; and short 125 12-month euro futures contracts
