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ABC Corporation is a USA MNC, and the corporation is expecting C$300,000 (Canadian dollars) in 120 days. The company has heard of a call option
ABC Corporation is a USA MNC, and the corporation is expecting C$300,000 (Canadian dollars) in 120 days. The company has heard of a call option with an exercise price of $.77 to expire in 120 days and has a premium of 0.03. There is a put option also available with an exercise price of $.73 to expire in 120 days and has a premium of $0.01. The company wants to purchase options to hedge against its future receivables. In 120 days, the stop rate will be $.74. How much money will the company receive if the receivables are hedged? Show workings
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