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show the graphic - Suppose that Mullen Co, a U.S.-based MNC, knows that it will need 300,000 pounds in one year in order to purchase
show the graphic - Suppose that Mullen Co, a U.S.-based MNC, knows that it will need 300,000 pounds in one year in order to purchase supplies. It is considering a currency call option to hedge this payable. Currency call options on the pound with expiration dates in one year currently have an exercise price of $1.18 and a premium of $0.04. On the following graph, use the blue points (circle symbols) to plot the contingency graph for hedging this payable with a call option. Plot the points from left to right in the order you would like them to appear. Line segments will connect automatically. Plot the 3 blue points for the following pound spot rates: $1.13, $1.18, $1.24
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