The outperformance chooser option
PROBLEM: A European exporter is worried about declining revenues from US and Swiss sales due to continued euro strength. The exporter does not have a strong view as to where currencies will trade in the next six months and is undecided between hedging the exposure now, thereby eliminating the risk of further euro appreciation or waiting for a retracement and the opportunity to hedge at better levels. The exporter would ideally like to hedge today at levels that existed at the end of 2002 -- in
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