Multiple Choice
A U.S.FI wishes to hedge a €10,000,000 loan using euro currency futures.Each euro futures contract is for 125,000 euros,and the hedge ratio is 1.40.The loan is payable in one year in euros. How many currency contracts are necessary to hedge this asset?
A) 112 contracts.
B) 57 contracts.
C) 80 contracts.
D) 75 contracts.
Correct Answer:
Verified
Correct Answer:
Verified
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