Hi, CFAI Book4 P.377 Example 8 Royal Teck(UK company) is obligated to pay $1.5 million to retirees. To hedge the currency risk, Royal Teck would need to go long a forward contract on the dollar. Sorry for my basic question… Is it possible to answer like this “Royal Teck would need to go SHORT a forward contract on the POUNDS” ? Thanks in advance!
Both are synonymous , but since the currency at home is UK Pounds , hedging using a pound based contract ( i.e. a forward contract on the dollar) sounds more intuitive for what they’re trying to do
Many thanks, janakisri !
Can I say “Long a currency forward” instead of " Long a forward contract on the foreign currency"?
deriv108 Wrote: ------------------------------------------------------- > Can I say “Long a currency forward” instead of " > Long a forward contract on the foreign currency"? You can say what you like. It is the other party which needs to understand 
Got it.