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8. You work for a U.S.-based MNC that will receive 100,000 euros (EUR) in 30 days from now. Assume that both Call options and

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8. You work for a U.S.-based MNC that will receive 100,000 euros (EUR) in 30 days from now. Assume that both Call options and Put options with an exercise price of $1.20 and an expiration date of 30 days from now have a premium of $0.03. You forecast that the EUR/USD spot rate in 30 days will be one of three values: Future Spot Rate Probability $1.14 30% $1.20 40% $1.26 30% If your firm decides to hedge the receivable with currency options, what is the expected cash flow to be received in U.S. dollars 30 days from now?

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