Bonumeur currency risk


Bonumeur SA is a French company that produces strollers for children and is specialized in strollers for twins and triplets for the EU market. The company buys the wheels of the strollers on the U.S. market. Invoices are paid in USD. What is Bonumeur's currency risk and how can the company hedge its exposure?

A. EUR depreciating against USD; selling EUR against buying USD forward

B. EUR depreciating against USD; selling USD against buying EUR forward

C. EUR appreciating against USD; selling EUR against buying USD forward

D. EUR appreciating against USD; selling USD against buying EUR forward

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Finance Basics: Bonumeur currency risk
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