Cross-border flows of funds and related currency transaction

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Reference no: EM131897368

Assume that Bobby Sox, Inc. is thinking about its contingent, cross-border flows of funds and the related currency transaction exposure, in which case the exposures are contingent on the Company successfully winning a very large project.Some of the exposures may be inbound flows while others may be outbound flows, but the relative size of each is unknown at this time. Assume these contingent flows (1) occur within the same currency pair, (2) have approximately the same possible timing and (3) are likely not to be in the same amount such that there will be a net inflow or outflow remaining. What do you conclude to be the appropriate strategy to hedge these contingent exposures? Why is that so?

Reference no: EM131897368

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