A Canadian exporting firm may use foreign exchange futures to hedge its exposure to exchange rate risk.

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A Canadian exporting firm may use foreign exchange futures to hedge its exposure to exchange rate risk. Its position in futures will depend in part on anticipated payments from its customers denominated in foreign currency. In general, however, should its position in futures be more or less than the number of contracts necessary to hedge these anticipated cash flows? What other considerations might enter into the hedging strategy?

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Investments

ISBN: 9781259271939

9th Canadian Edition

Authors: Zvi Bodie, Alex Kane, Alan Marcus, Lorne Switzer, Maureen Stapleton, Dana Boyko, Christine Panasian

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