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Ignoring settlement risk and assuming option premiums are

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Your company has reached its credit limit to Ford but Ford is insisting that your firm provide them some increased protection in the event a major project they are undertaking results in some unforeseen liability. Ignoring settlement risk and assuming option premiums are paid immediately at the time of the transaction, which of these strategies will notgive rise to increased credit exposure to Ford?

A. Selling a costless collar to Ford

B. Buying an option from Ford

C. Selling an option to Ford

D. None of the above

Reference no: EM13568921

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