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A company knows that it is due to receive a certain amount of a foreign currency in four months. What position is appropriate for hedging this inflow of the foreign currency? (Assume contract is on the foreign currency)

A. A long position in a 4-month call option

B. A short position in a 4-month call option

C. A long position in a 4-month put option

D. A short position in a 4-month put option

E. A long position in a future contract

PLEASE SHOW ALL FORMULA & WORK & EXPLANATIONS -----All rates are per annum with continuous compounding unless otherwise stated

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92311529

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