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A firm has a receivable of 10,000 due in 3 months. A 3 month put option is available with the strike price $1.30 per euro.
A firm has a receivable of 10,000 due in 3 months. A 3 month put option is available with the strike price $1.30 per euro. The option premium is $0.015.
What is the minimum receipt in dollars if hedging is done with the put option? The interest rate in the US is 4 % per annum or 1% for a 3 month period. Round the answer to the nearest dollar and report it without the $ symbol.
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