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11.07.2021

Contractual hedges use a forward contract or foreign currency option. define in 2-3 sentences

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05.12.2022, solved by verified expert

Mathematics, English, Physics. Research Scholar at Indian Institute of Technology, Roorkee

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Answer:

oreign currency option

Step-by-step explanation:

Contractual Hedging Contract means any rate or currency swap, cap or collar agreement or any other agreement designed to hedge risk with respect to interest rate or currency fluctuations, whether or not pursuant to a master agreement.

A forward hedge is a classic use of forward contracts to lock in a price today for a product to be bought or sold at a later date. A currency forward is essentially a customizable hedging tool that does not involve an upfront margin payment.

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Business

If you have a long position in a foreign currency, you can hedge with:. a) a short position in a currency forward contract. b) borrowing in the domestic and foreign money markets. c) a short position in an exchange-traded futures option. d) a short position in foreign currency warrants.

Step-by-step answer

P Answered by Specialist

a) a short position in a currency forward contract

Explanation:

If you have long exposure, then you hedge it with short exposure in forward market. In future options, you need to pay a premium, but in the forward market, you don't need to pay any premium and it can be customized.

Business

If you have a long position in a foreign currency, you can hedge with:. a) a short position in a currency forward contract. b) borrowing in the domestic and foreign money markets. c) a short position in an exchange-traded futures option. d) a short position in foreign currency warrants.

Step-by-step answer

P Answered by Specialist

a) a short position in a currency forward contract

Explanation:

If you have long exposure, then you hedge it with short exposure in forward market. In future options, you need to pay a premium, but in the forward market, you don't need to pay any premium and it can be customized.

Mathematics

You can buy jars of the same jam in 2 sizes large jar:440g for £1.54 small jar:340g for £1.26 By considering the price per gram, work out which jar is the best value for money. Working must be shown

Step-by-step answer

P Answered by PhD

Answer: 440 grams for 1.54 is the better value
Explanation:
Take the price and divide by the number of grams
1.54 / 440 =0.0035 per gram
1.26 / 340 =0.003705882 per gram
0.0035 per gram < 0.003705882 per gram

Mathematics

An ice cream shop offers 5 different flavors of ice cream and 9 different toppings. How many choices are possible for a single serving of ice cream with one topping?

Step-by-step answer

P Answered by PhD

For 1 flavor there are 9 topping

Therefore, for 5 different flavors there will be 5*9 choices

No of choices= 5*9

=45

Mathematics

Deanna gets 3 problems incorrect on a math quiz. Her score is 85%. How many questions are on the quiz?

Step-by-step answer

P Answered by PhD

The answer is in the image

The answer is in the image

Mathematics

Anthony received $150 for his birthday this year. This was $10 less than half the amount he received last year. How much money did Anthony receive for his birthday last year?

Step-by-step answer

P Answered by PhD

The answer is in the image

The answer is in the image

Mathematics

An online media service offers video and music downloads. Each download of a song costs $1. Each download of a video costs 5 times as much as the song download. You have a credit of $70. How many songs can you purchase after buying 12 videos?

Step-by-step answer

P Answered by PhD

The answer is in the image

The answer is in the image

Mathematics

Use the X method to find the solutions of6x2 + 2x – 20 = 0.

Step-by-step answer

P Answered by PhD

The answer is in the image

The answer is in the image

Mathematics

A 4300-N force from a car s engines produces an acceleration of 3.3 m/s2. What is the mass of the car? A. 4300 kg B. 1300 kg C. 14,000 kg D. 390 kg

Step-by-step answer

P Answered by PhD

F=ma

where F=force

m=mass

a=acceleration

Here,

F=4300

a=3.3m/s2

m=F/a

=4300/3.3

=1303.03kg

Mathematics

If a salesperson makes 6% commission, how much would they make from a $1,800 sale?

Step-by-step answer

P Answered by PhD

Salesperson will make 6% of 1800

=(6/100)*1800

=108

Salesperson will make $108 in $1800 sales

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