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Please provide solutions to the following problems. Thanks! 6. A firm has a receivable of C$4,000,000.00. They hegdge this exposure with a put option with
Please provide solutions to the following problems. Thanks!
6. A firm has a receivable of C$4,000,000.00. They hegdge this exposure with a put option with a strike price of $1.6500/C$. The premium of the option is $0.1485. If at the time of payment the spot price ends up equal to $1.5510/C$, how much did the firm end up with? (a) $6,006,000 (b) $5,610,000 (c) $6,600,000 (d) $6,204,000 (e) None of the above 7. A firm has a payable of 250,000,000.00. They hegdge this exposure with a call option with a strike price of $0.0165/. The premium of the option is $0.0010. If at the time of payment the spot price ends up equal to $0.0160/. What is the firm's total cost? (a) $4,250,000 (b) $4,375,000 (c) $4,000,000 (d) $3,750,000 (e) None of the above 8. A firm has a payable of P 25.000.000.00. They hegdge this exposure with a call option with a strike price of $0.3000/P. The premium of the option is $0.0180. If at the time of payment the spot price ends up equal to $0.3060/P. What is the firm's total cost? (a) $7,950,000 (b) $8,100,000 (c) $7,500,000 (d) $7,050,000 (e) None of the aboveStep by Step Solution
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