Question
Diana owes CHF 49,906 one year from today, but her assets are in USD. She wishes to eliminate her forex risk using options. She can
Diana owes CHF 49,906 one year from today, but her assets are in USD. She wishes to eliminate her forex risk using options. She can invest in put or call options with a strike price of USD 1.03 per CHF, and an option premium of 1.6%, and an underlying asset of either CHF or USD. The current spot rate is USD 0.9 per CHF. What would her profit or loss on this hedge be if the spot rate at maturity was USD 1.13per CHF?
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ISE Foundations Of Financial Management
Authors: Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen
18th International Edition
1265074658, 9781265074654
