Explain exact way in which the company could use products

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Reference no: EM13923550

Techno-Logical Inc. is a smart-phone manufacturer and has issued a five-year discount note in the amount of 160 million Japanese yen for procurement from its suppliers in Japan. Techno-Logical wants to hedge its currency exposure and the firm's financial director has the following suggestions.

(a) At-the-money Japanese yen call option contracts;

(b) Japanese yen forward contracts; or

Explain the exact way in which the company could use any of these products in their hedging strategy, being sure to compare and contrast the advantages and disadvantages of each.

Reference no: EM13923550

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