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you are a euro-based portfolio manager and you have invested in the technology sector of the U.S. stock market. You want to keep your exposure to tech stocks but are worried about an impending financial crisis in the United States. What is the best way to manage your dollar currency risk

Respuesta :

Answer: You enter into Euro/USD forward contract.

Explanation:

Based on the information given in the question, the best way to manage the dollar currency risk is to enter into Euro/USD forward contract.

A forward contract is a contract between two parties whereby an asset is being bought it sold at a particular price in the future. It should be noted that forward contract is good for speculations.

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