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3. A firm wants to use an option to hedge 12 million in receivables from New Zealand firms. The premium is $.03 The exercise price

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3. A firm wants to use an option to hedge 12 million in receivables from New Zealand firms. The premium is $.03 The exercise price is $.90. If the spot rate at the time of maturity is $.80 what is the total amount paid by the MNC if it acts rationally? Construct the contingency grapy for this MNC. (20%)

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