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A Singaporean importer has contracted to pay USD 1 million to its supplier at end May 2012. Given: USD call option - Strike USD1 =

A Singaporean importer has contracted to pay USD 1 million to its supplier at end May 2012.

Given:

USD call option

- Strike USD1 = SGD1.2800

- Premium = 1 Singapore cent per US dollar

Forecast end may 2012: spot rate is USD1 = SGD1.36

What is the total payment (in Singapore dollars) using the option market to hedge?

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