Question
Spears Co. will receive CHF 1,000,000 in 30 days. Use the following information to determine the total dollar amount received (after accounting for the option
Spears Co. will receive CHF 1,000,000 in 30 days. Use the following information to determine the total dollar amount received (after accounting for the option premium) if the firm purchases and exercises a put option:
| Exercise price | = | $.61 |
| Premium | = | $.02 |
| Spot rate | = | $.60 |
| Expected spot rate in 30 days | = | $.56 |
| 30-day forward rate | = | $.62 |
|
| a. | $630,000 |
|
| b. | $610,000 |
|
| c. | $600,000 |
|
| d. | $590,000 |
|
| e. | $580,000 |
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Entrepreneurship
Authors: Andrew Zacharakis, William D Bygrave
5th Edition
9781119563099
