Corporate Finance (The Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Corporate Finance (The Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
11th Edition
ISBN: 9780077861759
Author: Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher: McGraw-Hill Education
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Chapter 25, Problem 12CQ
Summary Introduction

To explain: Using of future contract on J Country yen to hedge its exchange rate risk and preference given to buying or selling of yen future and the quoted exchange rate actually matters.

Exchange rate

Exchange rate is used to define the value of one currency against the other currency. Exchange rate has two main components one is the currency used to compare that is domestic currency and other is the currency used to compare against that is the foreign currency.

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Foreign Exchange Risks; Author: Kaplan UK;https://www.youtube.com/watch?v=ne1dYl3WifM;License: Standard Youtube License