Your company will be issuing dividends in Canadian dollars, which is not your local currency, in 1 month's time. Is your company worried about a rise or a fall in Canadian dollar within the month.? In particular, the dividend amount to be paid out would be exactly CAD$34,900,540. If your company would like to hedge this amount, what are the advantages and disadvantages of using a forward contract versus future contracts?

Answer rating: 100% (QA)

If your company will be issuing dividends in Canadian dollars CAD and its not the local currency it may be concerned about currency exchange rate fluc... View the full answer