February’s Study Question of the Month

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Question (Relevant to the Series 7)

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A British company has signed a contract to purchase products in the US for resale in Britain.  However, the deal has been delayed.  In order to hedge themselves against a possible rise in the strength of the US dollar, of the following options, what would be the most logical strategy?

A. Buy puts on the pound
B. Write calls on the dollar
C. Buy puts on the dollar
D. Buy calls on the pound

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