Purchased equipment from a mexican

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Reference no: EM13960151

A1 Corp, a U.S. company, purchased equipment from a Mexican firm for Mex$1,000,000 to be paid in 3 months. The spot rate at the time of purchase is $0.06 per Mex$. A1 can hedge the FX risk associated with this transaction using which of the following derivative transactions:

I. Enter into a forward contract to sell Mex$1,000,000

II. Enter into a forward contract to buy Mex$1,000,000

III. Buy a put option to sell Mex$1,000,000

A. Only I

B. Only II

C. I and III

D. II and III

Reference no: EM13960151

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