Question

An English company that _____ automotive parts from France payable in euros in 90 days is most likely to ___ when the _______ is __________.

Select one:

a. imports, hedge, euros, appreciating

b. imports, hedge, pound, depreciating

c. importer, hedge, pound, appreciating

d. importer, hedge, euros, depreciating

Answer 1

Option b is correct

An importer losses if the domestic currency depreciates, hence he has to hedge the payables.

Here, English company imports...... and hedges..... when the home currency Pound is depreciating.