Q. 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: (Solved)
1. sell US dollars 90 days from now at the spot rate.
2. enter into a 90-day forward sale of US dollars for euros;
3. purchase US dollars 90 days from now at the spot rate;
4. enter into a 90-day forward purchase of US dollars for euros;
- b. enter into a 90-day forward sale of US dollars for euros;