Question: Discuss the difference between transactions exposure and economic exposure to exchange rate changes. Radetskiy Inc. has 10,000,000 of receivables due in 60 days. The spot

Discuss the difference between transactions exposure and economic exposure to exchange rate changes. Radetskiy Inc. has €10,000,000 of receivables due in 60 days. The spot rate on Euros is $1.08 the 60-day forward rate is $1.09.

Should Radetskiy hedge their receivables? Why, or why not? Discuss the differences between hedging with a Forward contract and hedging with a money market hedge. Which one is best? Why?

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