Question
A Japanese EXPORTER has a 1,200,000 receivable due in one year. Estimate the cost today of an options strategy that will eliminate the exchange rate
A Japanese EXPORTER has a 1,200,000 receivable due in one year. Estimate the cost today of an options strategy that will eliminate the exchange rate risk.PLEASE EXPLAIN ANSWER
Listed Options Strike Puts Calls
Euro (62,500) $1.25 = 1.00 $0.008 per $0.0075 per
Yen (12,500,000) $1.00 = 100 $0.006 per 100 $0.008 per 100
- $ 18,000
- $ 21,600
- $ 21,000
- $ 18,600
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Financial Management Concepts and Applications
Authors: Stephen Foerster
1st edition
013293664X, 978-0132936644
