spartanag07

yes it matters. you long euros will make more $$ when the euro appreciates, so you want to hedge the euro getting weaker. if it were flipped, you’d be a call not a put buyer to protect y’self. i doubt the CFA is going to try to trip you up on something like this, though.

spartanag07

Hi
saw this in Qbank Q:
Being long the currency means holding or expecting to receive a foreign currency, therefore to hedge this foreign currency exposure you must sell forward contracts (deliver foreign currency and receive domestic currency at the expiration of the contract).
Is it true ‘fward contract’ means deliver foreign currency and receive domestic currency????