Question
I NEED ANSWER ASAP PLEASE A firm purchases a currency call option to hedge payables in New Zealand dollars of 12.5 million New Zealand dollars.
I NEED ANSWER ASAP PLEASE
- A firm purchases a currency call option to hedge payables in New Zealand dollars of 12.5 million New Zealand dollars. The premium is $.03. The exercise price is $.55. Assume that the option is exercised. What is the total amount of dollars paid by the firm to buy the NZ dollars?
2. Mender Co. will be receiving 500,000 Australian dollars in 180 days. It has a 180-day put option with an exercise price of $.67 and a premium of $.02. What is the amount received from the currency option hedge (after considering the premium paid)?
3. You are a speculator who sells a put option on Canadian dollars for a premium of $.03 per unit, with an exercise price of $.86. The option will not be exercised until the expiration date, if at all. If the spot rate of the Canadian dollar is $.78 on the expiration date, your net profit per unit is:
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