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;
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