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Suppose a Canadian company has to pay 5 m sometime during the next 3 months. To hedge this the importer buys options on the ,
Suppose a Canadian company has to pay 5 m sometime during the next 3 months. To hedge this the importer buys options on the , and the option premium is $0.0220/, for options with K = $1.50/ = What is the actual amount that the importer will pay if the spot rate at the end of 3 months is $1.46/? $ 1.46 / $ 0.022 / $ 1.022 / $ 1.482 /
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