Question
A U.S. corporation has purchased currency put options to hedge a 110,000 Canadian dollar (C$) receivable. The premium is $0.04 and the exercise price of
A U.S. corporation has purchased currency put options to hedge a 110,000 Canadian dollar (C$) receivable. The premium is $0.04 and the exercise price of the option is $.75. If the spot rate at the time of maturity is $0.85, what is the net amount received by the corporation if it acts rationally?
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Personal Finance
Authors: Jeff Madura
3rd Edition
0321357973, 978-0321357977
