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A firm wants to use an option to hedge 2.5 million in Swiss Franc receivables from Switzerland. The premium is $.05. The exercise price is

A firm wants to use an option to hedge 2.5 million in Swiss Franc receivables from Switzerland. The premium is $.05. The exercise price is $.75. If the option is exercised, what is the total amount of dollars received (after accounting for the premium paid)?

a.
$1,750,000

b.
$2,000,000

c.
$1,250,000

d.
$1,875,000

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