Question: Answer the following questions: 1. Why does the exchange rate fluctuation concern Cain? Is her position longer short? 2. If Cain decides to use options

Answer the following questions:

1. Why does the exchange rate fluctuation concern Cain? Is her position longer short?

2. If Cain decides to use options would she use a put or a call?

3. Should Cain hedge her position in US$? Why or why not?

4. Which hedge should she use?

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