Multiple Choice
An Australian company has received USD in payment for goods exported.At the time of receiving the USD,the exchange rate is quoted as AUD/USD 0.5650.Rather than immediately converting the USD into AUD,the company decides to 'speculate' on a favourable movement in the exchange rate.In 'today + n days' the exchange rate is AUD/USD 0.5750.Which of the following statements is correct?
A) The company has taken a 'long' position in the USD.
B) The exporter company has made a loss on its FX position.
C) The opportunity cost of interest forgone will affect the profitability of the FX position.
D) All of the given answers are correct.
Correct Answer:
Verified
Correct Answer:
Verified
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