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In your first job out of college, you are hired as the CFO of Comcast

Economics

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In your first job out of college, you are hired as the CFO of Comcast. Not bad. You decide to import servers from China which will cost 654m Yuan, which will be due 2 years from today. What type of currency transaction might help you mitigate the foreign exchange risk of this payment and avoid the company holding large amounts of Yuan for the next 2 years? a. Spot transaction b. Forward c. Currency Swap In your role as Comcast CFO, you identify a growth opportunity in China. You decide to build a new plant in Shanghai. The plan will cost you lb Yuan today, but it will pay off 1.5b Yuan in 2 years. When you receive the 1.5b Yuan, you will want to convert it back to USD. What type of currency transaction might help you mitigate the foreign exchange risk of this arrangement? a. Spot transaction b. Forward c. Currency Swap What type of transaction is most appropriate if you have to make a $10m Euro payment this afternoon? a. Spot transaction b. Forward c. Currency Swap Each time you convert currencies at the bank or a currency exchange (e.g. Travelex), what type of transaction are you making? a. Spot transaction b. Forward c. Currency Swap