How could abc use currency futures to hedge its position, Ask an Expert

Economics

Q. ABC Company expects that it will receive a large order from the Spain government. But the order occurs; ABC will be paid about 3 million Euros. All of ABC's expenses are in dollars ($). ABC would like to hedge this position. ABC has contacted a bank with brokerage subsidiaries that can help it hedge with foreign exchange derivatives.

How could ABC use currency futures to hedge its position and what is the risk of hedging with currency futures?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9158644

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