An MNC Wants to Hedge Against the Potential Risk That

Multiple Choice

An MNC wants to hedge against the potential risk that the euro denominating its payables appreciates against the dollar. Yet, it also wants flexibility to benefit by buying euros at the spot rate when payables are due if the euro depreciates by that time. The appropriate hedge for this MNC would be a(n) ____ hedge.

A) money market
B) futures
C) put option
D) call option