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Forward cover for an export receivable in USD is best executed by:
ALeaving the receivable open as natural hedge
BBuying USD forward to lock in the appreciation
CSelling USD forward at today's quoted forward rate
DBorrowing in INR and depositing in USD
Answer & Solution
Correct answer: C. Selling USD forward at today's quoted forward rate
1. Identify what the question asks: this concept maps to exporthedge (§12).
2. Apply the framework or formula relevant to the topic.
3. Eliminate distractors and arrive at the correct option (C).
_Source: ICAI BoS CA Final Paper 2, Ch 10 "Foreign Exchange Exposure and Risk Management"_
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