Which of the following is the most unlikely strategy for a U.S. firm that will be purchasing Swiss francs in the future and desires to avoid exchange rate risk (assume the firm has no offsetting position in francs)?
A. purchase a call option on francs.
B. obtain a forward contract to purchase francs forward.
C. sell a futures contract on francs.
D. all of the above are appropriate strategies for the scenario described.
Answer:C
Which of the following is the most unlikely strategy for a U.S. firm that will be purchasing Swiss francs in the future and desires to avoid exchange rate risk (assume the firm has no offsetting position in francs)?
A. purchase a call option on francs. B. obtain a forward contract to purchase francs forward. C. sell a futures contract on francs. D. all of the above are appropriate strategies for the scenario described.