In: Finance
a. What a company should do to hedge foreign currency that will be received or paid? Explain your answer.
b. What are advantages of futures options over spot options?
c. What does vega measure? What can you tell from vega value? Can the vega of a derivatives portfolio be changed by taking a position in the underlying asset? Explain your answer.
Ans a)
Hedging Against foreign currency exposure: There are various way a firm can hedge against foreign currency exposure
Ans b)
Advantage of Futures is over spot is
Ans c)