Question
A U.S. corporation has purchased currency put options to hedge a 100,000 Canadian dollar (C$) receivable. The premium is $.01 and the exercise price of
A U.S. corporation has purchased currency put options to hedge a 100,000 Canadian dollar (C$) receivable. The premium is $.01 and the exercise price of the option is $.85. If the option is exercised, what is the total amount of dollars received (after accounting for the premium)?
| a. | $75,000 | |
| b. | $84,000 | |
| c. | $74,000 | |
| d. | $85,000 |
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Personal Finance Turning Money into Wealth
Authors: Arthur J. Keown
7th edition
978-0133856507, 013385650X, 133856437, 978-0133856439
