What is the payback period for set of cash flows

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Reference no: EM132046553

1. In a hedging situation, forward and futures contracts

A. Cannot protect the holder against the isk of adverse movements in exchange rates.

B. Should always be used instead of options for hedging by multinational corporations.

C. Can expire worthless if the holder so chooses.

D. Eliminate the possibility of gaining a windfall profit from favorable movements in exchange rates.

2. What is the payback period for the following set of cash flows?

Year 0 $-4,400

Year 1 1,900

Year 2 1,700

Year 3 2,600

Year 4 2,100

Reference no: EM132046553

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