why a firm should consider hedging net payables and recivables with currency options rather than forward contracts or future contracts

How can the company use currency futures contracts to hedge against exchange rate risk?

Explain about the hedging against the foreign currency risk.

Explain with examples how to measure exchange rate risk for long positions and short positions Notes : Use your own numbers in making calculations!

Assume a company needs to hedge payables. Which of the following conditions has to be met so a company would choose the options hedge? The break-even spot exchange rate is greater than the forward exchange rate. The break-even spot exchange rate is less than the forward exchange rate. The break-even spot exchange rate is less than the spot exchange rate. The break-even spot exchange rate is greater than the spot exchange rate.

How might thetreasurer of a multinational firm use the interest rate parity concept (a) when deciding howto invest the firm’s surplus cash and (b) whendeciding where to borrow funds on a short-termbasis?

Hedgers should buy calls if they are hedging an expected outflow of foreign currency.   True or False ? Explain.

Under what conditions can companies use hedge accounting to account for a foreign currency option used to hedge a forecasted foreign currency transaction?

Write a paragraph on how MNCs could revise their bonus structure so that bonuses are not influenced by exchange rate movements. Alternatively, offer arguments to support leaving the bonus structure as it is.

A 3. Briefly explain below the different theories about the irrelevance/relevance of exchange rates. Think and discuss about all the firms' factors that are affected by movements in exchange rates.