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  • The expected cost of hedging is the difference between the forward exchange rate for buying/selling and the expected future … for buying/selling. #111
  • The expected cost of hedging can be estimated as … of the difference between the forward spread and the spot spread. #112
  • The decision to use … hedging does not depend on there being a forward-risk premium. The premium represents a cost and a benefit. #113
  • The bid-ask spread on short-maturity forward transactions does not substantially exceed that on spot transactions, so that the expected cost of forward hedging is small. #114
  • Futures-market hedging achieves essentially the different result as forward hedging. #115
  • Foreign-currency accounts payable can be hedged by buying a call option on the foreign currency, and accounts receivable can be hedged by buying a put option on the foreign currency. #116
  • An importer can hedge with a swap by borrowing in the home currency, buying the foreign-currency spot, and investing in the foreign currency. #117
  • The balance of payments accounts include the #118
  • Foreign exchange exposure can be eliminated by invoicing in foreign currency. #119
  • In part, a country's current account measures #120
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