Which of the following reflects a hedge of net payables in Egyptian pounds by a

Question

Which of the following reflects a hedge of net payables in Egyptian pounds by a U.S. firm?? ?Borrow U.S. dollars, convert them to pounds, and invest them in a Egyptian pound deposit. Sell pounds forward. ?Sell a currency call option in Egyptian pounds. Purchase a currency put option in Egyptian pounds. none of the options listed
Which of the following reflects a hedge of net payables in Egyptian pounds by a U.S. firm?? ?Borrow U.S. dollars, convert them to pounds, and invest them in a Egyptian pound deposit. Sell pounds forward. ?Sell a currency call option in Egyptian pounds. Purchase a currency put option in Egyptian pounds. none of the options listed
Which of the following reflects a hedge of net payables in Egyptian pounds by a U.S. firm?? ?Borrow U.S. dollars, convert them to pounds, and invest them in a Egyptian pound deposit. Sell pounds forward. ?Sell a currency call option in Egyptian pounds. Purchase a currency put option in Egyptian pounds. none of the options listed

Explanation / Answer

Borrow U.S. dollars, convert them to pounds, and invest them in a Egyptian pound deposit.

The above should be the answer..

in this way the company will have investment in Egyptian pound which will be used to pay the payables

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