Question

A US firm is bidding for a contract required by the Swiss government. The firm will not know until three months from now, whether the bid is accepted. The firm will need Swiss francs to cover expenses but will be paid by the Swiss government in dollars if it is awarded the contract. The US firm can best insulate itself against exchange rate exposure by:A. buying Swiss franc call options.B. buying Swiss franc put options;C. selling Swiss franc futures;D. buying Swiss franc futures;

Answer 1

Answer:

A. Buying Swiss franc call.