Your U.S firm has an accounts payable denominated in UK pounds due in 6 months. Toprotect yourself against unexpected changes in the dollar/pound exchange rate you shouldbuy a pound put option.
举一反三
- When the value of the dollar changes from 0.5 pounds to 0.75 pounds, then the pound has appreciated and the dollar has depreciated.
- If the U.S. dollar and British pound have a flexible exchange rate, and the U.S. dollar changes so that one needs more dollars to buy one pound, the currency has A: depreciated. B: appreciated. C: devalued. D: revalued.
- If the rate of inflation in the United States is 4% and the rate of<br/>inflation in the United Kingdom is 3%, relative purchasing power<br/>would predict that( ) A: the pound will appreciate relative to the dollar. B: the pound will depreciate relative to the dollar. C: both the dollar and the pound will depreciate due to inflation. D: both the dollar and the pound will appreciate due to inflation.
- If the spot exchange rate is £1=$1.50 when the market opens, and £1=$1.48 at the end of the day, the pound has appreciated, and the dollar has depreciated.
- If the Fed wants to depreciate the U.S. dollar against the British pound, it will ________. A: sell foreign exchange B: decrease the money supply C: sell British pounds D: sell U.S. dollars