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Which of the Following Is Correct? If You Fear the U.S

Question 3

Multiple Choice

Which of the following is correct? If you fear the U.S. dollar will rise against the euro, with a resulting adverse change in the dollar value of the equity of your French subsidiary, you can hedge by


A) selling euros forward in the amount of net assets
B) buying euros forward in the amount of net assets
C) reducing the liabilities of the subsidiary
D) selling euros forward in the amount of total assets

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