Company treasurer think that option strategies need to be developed due to future foreign currency transactions that will occur when their contract with an Italian high-tech firm is finalized. The treasurer first need you to construct a memo on various hedging strategies including a bull spread, a butterfly spread, and a ratio spread. To enhance the discussion, use your resources to find existing securities that could be used for one of the hedges. Qualitatively describe your hedging strategy and give a brief explanation of the pros and cons of your individual hedge.

Company treasurer think that option strategies need to be developed due to future foreign currency transactions that will occur when their contract with an Italian high-tech firm is finalized. The treasurer first need you to construct a memo on various hedging strategies including a bull spread, a butterfly spread, and a ratio spread. To enhance the discussion, use your resources to find existing securities that could be used for one of the hedges. Qualitatively describe your hedging strategy and give a brief explanation of the pros and cons of your individual hedge.