Suppose Awesome Bar & Grill Inc. is a sports bar located in Canada that will buy 1000 kegs of beer, at 3,500 pesos per keg, from a supplier in Mexico every month for the next 10 years so it can sell beer at it's Monday Night Football events in Vancouver. Awesome Bar & Grill Inc. sells the beer to its customers in Canadian Dollars but pays for the beer from its supplier in Mexican Pesos; Awesome Bar & Grill Inc. therefore exposes itself to currency risk. What kind of financial instrument would best fit Awesome's risk management needs? Select one item from the list below Group of answer choices foreign currency swap barley future stock option D&O insurance.
Suppose Awesome Bar & Grill Inc. is a sports bar located in Canada that will buy 1000 kegs of beer, at 3,500 pesos per keg, from a supplier in Mexico every month for the next 10 years so it can sell beer at it's Monday Night Football events in Vancouver. Awesome Bar & Grill Inc. sells the beer to its customers in Canadian Dollars but pays for the beer from its supplier in Mexican Pesos; Awesome Bar & Grill Inc. therefore exposes itself to currency risk. What kind of financial instrument would best fit Awesome's risk management needs? Select one item from the list below Group of answer choices foreign currency swap barley future stock option D&O insurance.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Suppose Awesome Bar & Grill Inc. is a sports bar located in Canada that will buy 1000 kegs of beer, at 3,500 pesos per keg, from a supplier in Mexico every month for the next 10 years so it can sell beer at it's Monday Night Football events in Vancouver. Awesome Bar & Grill Inc. sells the beer to its customers in Canadian Dollars but pays for the beer from its supplier in Mexican Pesos; Awesome Bar & Grill Inc. therefore exposes itself to currency risk. What kind of financial instrument would best fit Awesome's risk management needs?
Select one item from the list below
Group of answer choices
foreign currency swap
barley future
stock option
D&O insurance.
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