Wants to hedge this cash flow against unfavorable exchange


A US firm is expecting to receive 20 million JPY in 6 months from a subsidiary in Japan, and wants to hedge this cash flow against unfavorable exchange rate changes. Which of the following would work as a way to hedge this receivable?

Long call option on the JPY

Long futures on the JPY

Long put option on the JPY

Short futures on the JPY

Short call option on the JPY

Short put option on the JPY

Short the JPY in the spot market

Buy the JPY in the spot market

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Financial Management: Wants to hedge this cash flow against unfavorable exchange
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