Question: Hot Kustoms Company estimates that with 30% probability it will have to pay a supplier 10000 Hong Kong dollars in three months. How can Hot

Hot Kustoms Company estimates that with 30% probability it will have to pay a supplier 10000 Hong Kong dollars in three months. How can Hot Kustoms best hedge this exposure? Explain. Would your answer change if Hot Kustoms had to pay the supplier with 100% certainty? Why or why not?

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