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A risk manager has a long forward position of USD 1 million but the option...

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A risk manager has a long forward position of USD 1 million but the option portfolio decreases JPY 0.50 for every JPY 1 increase in his forward position. At first approximation, what is the overall result of the options positions?

A.

The options positions hedge the forward position by 25%.

B.

The option positions hedge the forward position by 50%.

C.

The option positions hedge the forward position by 75%.

D.

The option positions hedge the forward position by 100%.

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