You are the VP and Treasurer of Wilco & Company, a sizeable multinational firm. Assume that your
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Question:
You are the VP and Treasurer of Wilco & Company, a sizeable multinational firm. Assume that your general approach to hedging the Company's transaction risks is to do nothing. However, you do from time to time, like to play the market a little with the firm's surplus cash and you frequently speculate on anticipated moves in currencies. One of those is the British Pound GBP which, based on your careful analysis, you truly expect the GBP to STRENGTHEN!!!!!!!!!!!! against the US Dollar in the next six months.
Question A What investment or set of investments could be used to take advantage of this speculative expectation?
Question B What is the degree of financial risk associated with the investment or investments you identified in part a just above in the event you are wrong about the expected trend in the GBPUSD
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