Euros futures in the futures exchange market

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1. If your firm expects the euro to substantially appreciate, it could speculate by ____ euro call options or ____ euros futures in the futures exchange market.

selling; selling

selling; purchasing

purchasing; purchasing

purchasing; selling

2. If a Japanese firm desires to avoid the risk from exchange rate fluctuations, and it will receive €180,000 in 60 days from its business client in France, it could: (Points : 3.5)

-obtain a 60-day forward purchase contract on euros (i.e., buy a a 60-day forward contract on euros).

-obtain a 60-day forward sale contract on euros(i.e., sell a a 60-day forward contract on euros).

-purchase a 60-day call options on euros.

-sell euros when it’s due at the spot market with the spot rate.

Reference no: EM132005915

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