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Suppose you have to pay 1,000,000in 9months. You have the following information: 6-month forward rate: 0.80/$, plus $50,000 forward contract fee payable in 6 months,
Suppose you have to pay 1,000,000in 9months. You have the following information:
6-month forward rate: 0.80/$, plus $50,000 forward contract fee payable in 6 months, 6-month call option: strike price of 0.75/$, plus 2.5% premium payable in 6 months.
Six months from now, in USD, the forward contract will cost ____, and the call option will cost _____.
a. $1250,000; $1,333,333
b. $1,300,000; $1,366,667
c. $1,300,000; $1,333,333
d. $1,250,000; $1,366,667
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