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Suppose Stella wanted the option to buy 10,000,000 at a strike- price of $0.0100. For this right, the premium costs 0.2 cents and this option
Suppose Stella wanted the option to buy 10,000,000 at a strike- price of $0.0100. For this right, the premium costs 0.2 cents and this option expires in May. The current spot is: $0.0102/. If Stella is looking to hedge, is she the exporter or importer? What will Stella pay now in order to have this option to buy Yen in May? At what strike price will she make money? Lose money? If the spot goes to $0.0083/in May, what should she do with this contract? If the Spot in May is $0.0105/.. should she exercise his contract
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