Question
AUS firm wants to use a put option to hedge SGD1 million in (Singapore Dollars) receivables froma Singapore firm. The premium is USD 0.03/SGD. The
AUS firm wants to use a put option to hedge SGD1 million in (Singapore Dollars) receivables
froma Singapore firm. The premium is USD 0.03/SGD. The exercise price is US$ 0.80 If the option is exercised,Current exchange rate is USD 0.75/SDGWhat is the total amount of US dollars received if the option isexercised?(after accounting for the premium paid) (Assume no transaction costs)
USD 770,000
USD 720,000
USD 800,000
USD 750,000
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Business Statistics A Decision Making Approach
Authors: David F. Groebner, Patrick W. Shannon, Phillip C. Fry
9th Edition
013302184X, 978-0133021844
