International trade always creates the need for forward operations, if the exchange risk i
In the converse case a Swiss exporter knows that in three months he will receive U. S. dollars in payment for this export. Here again, in order to eliminate the exchange risk, he hedges by selling the U. S. Dollar three months forward.
Not to do these, forward transactions would be equivalent to speculating, on a fall of the Euro in the first case, or a rise of the U. S. dollar in the second case.
In the first case, "invoiced in Euro" means that the contract asks the Swiss importer to pay in Euro to the Exporter.
A.Right
B.Wrong
C.Doesn't say