If I am to be receiving a large quantity of Japanese yen in 6 months, to hedge the risk that the exchange rate will change and eliminate my profit in dollars, I should
A)sell a futures contract in yen.
B)buy a futures contract in yen.
C)buy a T-bill futures contract.
D)only agree to accept dollars in the future.

Question

Quizplus · Accepted Answer

Selling a futures contract in yen allows you to lock in the current exchange rate for the future date, effectively hedging against the risk of the yen weakening against the dollar, which would otherwise reduce the dollar value of the yen you will receive.

If I Am to Be Receiving a Large Quantity of Japanese