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A French firm is expecting to receive 10.4 million in 120 days as a result of an export sale to a Japanese semiconductor firm. What
A French firm is expecting to receive 10.4 million in 120 days as a result of an export sale to a Japanese semiconductor firm. What will it cost, in total, to purchase an option to with a strike price of 0.007353/? The spot rate is 0.007200/ (See table for initial values.)
Data table A Japanese firm wishing to buy or sell euros (the foreign currency) A European firm wishing to buy or sell yon (the foreign currency) Variable Variable rd Value 2.1870 % 0.0875 Domestic interest rate (% pa) Foreign interest rate (% p.a.) Volatility (% p.a.) rd Value 0.0875 % 2.1870 % rf " S 10.000 % 5 10.000 % d1 d1 d2 d2 -0.36429 -0.42162 0.35782 0.33665 -0.21722 -0.27456 0.41402 0.39183 N(1) N(D1) Nd2) N/d2) Print Done Step by Step Solution
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