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  • 17-05-2021
  • Business
contestada

If your company is expected to pay 100 million to a company in Japan by 9/30/21 list 2 ways that my company can hedge the transaction

Respuesta :

Munali Munali
  • 18-05-2021

Answer:

The company can opt for futures contracts.

The company can go for matching of receipts.

Explanation:

There are various techniques for transferring foreign exchange risk. Many organizations go for hedging techniques to minimize the risk exposure with the fluctuation in the foreign currency. When a company is expecting payments in six months, it can go for futures contract or matching the payment with the equal amount receipts.

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