Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A German company has purchased currency put options (each contract size AUD10,000) to hedge an AUD160,000 account receivable. The premium is EURO.0123 per currency option

image text in transcribed
A German company has purchased currency put options (each contract size AUD10,000) to hedge an AUD160,000 account receivable. The premium is EURO.0123 per currency option contract and the exercise price of the option is EURO.7961. The spot rate at the time of maturity is EURO.8113. What is the net amount received by the company? a. EUR127,840 O b. EUR129,808 O c. EUR125,408 O d. EUR127,376 O e. None of the options in this question are correct

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

E Marketing Theory And Application

Authors: Stephen Dann ,Susan Dann

2011 Edition

0230203965, 978-0230203969

More Books

Students also viewed these Finance questions

Question

Define Consumerism.

Answered: 1 week ago

Question

Name the system that includes heart, blood vessels and blood?

Answered: 1 week ago

Question

1. Electrochemical reaction?

Answered: 1 week ago