【单选题】S. firm has an asset in Britain whose local currency price is random. For simplicity, suppose there are only three states of the world and each state is equally likely to occur. The future local curre...
A.
The firm faces no exchange rate risk since the local currency price of the asset and the exchange rate are negatively correlated.
B.
The firm faces substantial exchange rate risk since the local currency price of the asset and the exchange rate are positively correlated.
C.
The firm's exchange rate exposure can be completely hedged with derivatives written on the British pound.
D.
Since randomness is involved, no hedging is possible.