Company ABC recently sold CAD 10,000,000 worth of products to one of its Canadian customers and is
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Company ABC recently sold CAD 10,000,000 worth of products to one of its Canadian customers and is expected to receive the payment in CAD in 30 days. Your management team would like to try out hedging with options for the first time. Call option with strike price of $0.90/CAD is available with premium of $0.10/CAD. Put option with strike price of $0.90/CAD is available with premium of $0.20/CAD In 30 days, the spot exchange rate becomes $0.80/CAD, what will be the total USD gain/loss to the Company including premium on the option?
Related Book For
Foundations Of Business
ISBN: 9780357717943
7th Edition
Authors: William M. Pride, Robert J. Hughes, Jack R. Kapoor
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