Question
An Australian company has purchased currency call options to hedge a 230,000 Brazilian Real payable. The premium is A$.035 and the exercise price of the
An Australian company has purchased currency call options to hedge a 230,000 Brazilian Real payable. The premium is A$.035 and the exercise price of the option is A$.30. If the spot rate at the time of maturity is A$.60, what is the total amount paid by the corporation if it acts rationally? A. A$146,050. B. A$69,000. C. A$60,950. D. A$138,000. E. A$77,050.
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ISE Real Estate Finance And Investments
Authors: Jeffrey Fisher William B. Brueggeman
17th International Edition
1264892888, 9781264892884
