Your CEO routinely approves changes in the fire insurance policies of your firm to protect the value

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Your CEO routinely approves changes in the fire insurance policies of your firm to protect the value of its buildings and manufacturing equipment. Nevertheless, he argues that the firm should not buy foreign currency options because, he says, “We don’t speculate in FX markets!” How could you convince him that his positions are mutually inconsistent?

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International Financial Management

ISBN: 978-0132162760

2nd edition

Authors: Geert Bekaert, Robert J. Hodrick

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