[Sdb2fsu]

So I am struggling with these hedging questions. When to buy/sell in the future,etc. I font know what it is; everytime I get a question I pick the opposite of the answer. Any quick and dirty way to wrap my brain around it? Oh, my test is Wednesday.

BEC - 60, 71, 79
AUD - 73, 66, 87!!!!! Yes! I am done!
REG - 74, 76
FAR - 75

Yaeger Review for all except my last AUD score (Roger)!

[SusanStudies]

The way I think of these hedging problems is as follows:

If you have a receivable in euros to be received in say 90 days you wouldn't want to buy more euros in the future because that would double your receivable. You would want to sell euros. Selling euros for future delivery (90 days) would give you a payable to offset the receivable. This hedges the exchange rate risk.

In contrast, if you have a payable in euros, you would want to buy euros to offset the payable.

Receivable = Sell

Payable = Buy

Good luck on your test.

AUD: 07/11/11 - Passed
BEC: 08/27/11 - Passed
FAR: 01/17/12 - Passed
REG: 04/30/12; Re-take 7/16/12 - Passed

FINISHED!!!!!!!!

[Sdb2fsu]

@SusanStudies thanks. Yea I try to use that logic (Cindy). I think were my issue is that I think when you want to sell something I think of a payable for some reason (prolly cause I am tired lol). I will try that logic more and hopefully I don't get confused on the test. How did you feel when you took yours?

BEC - 60, 71, 79
AUD - 73, 66, 87!!!!! Yes! I am done!
REG - 74, 76
FAR - 75

Yaeger Review for all except my last AUD score (Roger)!

[Author]

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