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XIII NISM Series XIII
Medium

An export-import company earns in USD and pays imports in EUR, converting the balance into INR. It is concerned about USDINR risk. What is the best hedging strategy?

Practice question from NISM Series XIII for SIF - Mock Test 4 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    USD depreciating against INR, long USDINR

  2. USD appreciating against INR, short USDINR

    Correct answer

  3. C

    USD depreciating against INR, short USDINR

  4. D

    USD appreciating against INR, long USDINR

A full explanation for this question is being written. In the meantime, the correct answer is highlighted above.

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