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A US exporter is due to receive 2m in 6 months time from a German customer. The exporters bank has offered the following 6 months
- A US exporter is due to receive 2m in 6 months time from a German customer.
The exporters bank has offered the following 6 months options on the 2m:
Put options are quoted as US$(cents) per Euro (1)
Exercise price premium
115.00 1.32
116.00 1.58
117.00 2.20
118.00 3.33
If the spot rate in 6 months is 117.50 cents, what is the net receipt to the US exporter?
| A. | US$2,394,000 |
| B. | US$2,286,000 |
| C. | US$2,306,000 |
| D. | US$2,340,000 |
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