How are you sir. I was working on Washi Co question in BPP Revision kit. According to my understanding we are supposed to choose call option if the transaction to be hedged involves receiving money. However the answer chose put option thank you for your help.
Ask the Tutor ACCA AFM
WASHI CO Sept 2018
5y ago#1They are receiving euros and need to sell euros to convert to Japanese Yen.
The contract size is quote in euros and therefore they need the option to sell euros at a fixed rate, which is a put option.
Thank you sir
5y ago#3You are welcome :-)
Topic lockedNew replies are closed.