Problem $11\mathrm{.}06($Hedging with Forward Contracts$)$

Explain how a U$.$S$.$ corporation could hedge net receivables in Malaysian ringgit with a forward contract,

The U$.$S$.$ corporation could $-$Select$-$ ringgit forward using a forward contract. This is accomplished by negotiating with a bank to provide the bank in exchange for at a specified exchange rate $($the forward rate$)$ for a specified future date.

Explain how a U$.$S$.$ corporation could hedge payables in Canadian dollars with a forward contract.

The U$.$S$.$ corporation could Canadian dollars forward using a forward contract. This is accomplished by negotiating with a bank to provide the bank $-$ Select$-$ dollars in exchange for dollars at a specified exchange rate $($the forward rate$)$ for a specified future date.

Continue without saving

$1.($Purchase$/$Sell$)$

$2.($Ringgit$/$Dollars$)$

$3.($Ringgit$/$Dollars$)$

$4.($Purchase$/$Sell$)$

$5.($Canadian$/$U$.$S$.)$

$6.($Canadian$/$U$.$S$.)$