Question: 5. How does a foreign currency option differ from a foreign currency forward contract? 6. How does the timing differ for hedges of the following?

5. How does a foreign currency option differ from a foreign

5. How does a foreign currency option differ from a foreign currency forward contract? 6. How does the timing differ for hedges of the following? a. Foreign-currency-denominated assets and liabilities. b. Foreign currency firm commitments. c. Forecasted foreign currency transactions. 7. Why might a company prefer a foreign currency option rather than a forward contract in Page 266 hedging a foreign currency firm commitment? Why might a company prefer a forward contract over an option in hedging a foreign currency asset or liability? 8. How are foreign currency derivatives such as forward contracts and options reported on the balance sheet

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