From the Perspective of Detroit Co

Multiple Choice

From the perspective of Detroit Co., which has payables in Mexican pesos and receivables in Canadian dollars, hedging the payables would be most desirable if the expected real cost of hedging payables is ____, and hedging the receivables would be most desirable if the expected real cost of hedging receivables is ____.

A) negative; positive
B) zero; positive
C) zero; zero
D) positive; negative
E) negative; negative