A forward contract forces its seller to sell the underlying, Financial Management

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A forward contract forces its seller to sell the underlying

1. A Japanese company will receive 50 million euros in 9 months from its overseas operations. The company could buy a forward contract on 50 million euros to hedge its foreign exchange risk.

True

False

2. A forward contract forces its seller to sell the underlying asset at the spot rate on the day that the forward contract expires.

True

False

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