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A potentially significant difference between using a forward hedge and a money m

ID: 2653823 • Letter: A

Question

A potentially significant difference between using a forward hedge and a money market hedge is that the:

forward hedge is less risky.

money market hedge produces less cash flow.

forward hedge produces less cash flow.

money market hedge involves greater transaction costs.

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In dealing with options, the strike price is:

the price that the parties negotiate the option price when the option is exercised.

the set price at which the option is exercised.

not relevant.

set by the seller of the currency subject to the option.

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forward hedge is less risky.

money market hedge produces less cash flow.

forward hedge produces less cash flow.

money market hedge involves greater transaction costs.

----------------------

In dealing with options, the strike price is:

the price that the parties negotiate the option price when the option is exercised.

the set price at which the option is exercised.

not relevant.

set by the seller of the currency subject to the option.

---------------

Explanation / Answer

Answer to Q No. A

A potentially significant difference between Money market hedge and Forward Hedge is a

Answer to Q. No. B

Strike Price is

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