If Salerno Inc. desires to lock in a minimum rate at which it could sell its net receivables in Japanese yen but wants to be able to capitalize if the yen appreciates substantially against the dollar by the time payment arrives, the most appropriate hedge would be: Group of answer choices purchasing yen call options. a money market hedge. a forward sale of yen. purchasing yen put options. selling yen put options.

Question

Dahlia Hanson

Business

25 August, 02:01

If Salerno Inc. desires to lock in a minimum rate at which it could sell its net receivables in Japanese yen but wants to be able to capitalize if the yen appreciates substantially against the dollar by the time payment arrives, the most appropriate hedge would be: Group of answer choices purchasing yen call options. a money market hedge. a forward sale of yen. purchasing yen put options. selling yen put options.

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Sandra · Answer 1

Purchasing yen put option

Explanation:

Hedging is a risk management practice where assets either liquid or any other form is protected from risks as a result of future loss from fluctuation in prices of commodities, securities or currencies.

One of the ways of hedging is purchasing a put option. This gives the owner the privilege to sell a listed assert at a given strike price through an tikk the option's expiration period.