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FIN -A German corporation




Question;A German corporation finalized a sale to a Thai client on April 15. The German corporation willdeliver some gardening equipment on May 31 and will be paid 345 million baht on June 30. Thecurrent spot exchange rate is 40 baht/euro. The German corporation is worried about a depreciationof the baht in the coming two months and wishes to sell those baht forward against euros.How can a German corporation hedge the currency risk?a. Sale 8,625,000 bhat for June 30 delivery.b. Sale 345 million bhat for June 30 delivery.c. Buy 345 million bhat for June 30 delivery.


Paper#49603 | Written in 18-Jul-2015

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