Sunday, August 14, 2011

How to hedge currency risk in this case?

If a trading company in Japan buys products from the United States for delivery in six months and pay in US dollars (ex: US$100,000 payable in six months to the American company after delivery of some machinery to the Japanese company) . what could be the 2 hedging ways to hedge its currency risk, how much it reduces the risk by using these options???

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