Question: Assume that the forward rate is an unbiased but not necessarily accurate forecast of the future exchange rate of the yen over the next several
Assume that the forward rate is an unbiased but not necessarily accurate forecast of the future exchange rate of the yen over the next several years. Based on this information, do you think Raven Co should hedge its remittance of expected Japanese yen profits to the US parent by selling yen forward contracts?
If the forward rate is an unbiased forecast, the amount of dollars received from remittances when hedging should be Selectless thanmore thanthe same asItem the amount of dollars received from remittances when not hedging.
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