Question
Tesla exports cars to many countries, including China. The company expects to receive 12 million yuan () in one year from its exports. The firm
Tesla exports cars to many countries, including China. The company expects to receive 12 million yuan () in one year from its exports.
The firm expects the following exchange rate scenarios and probabilities:
| Scenario | Spot rate in one year | Probability |
|---|---|---|
| A | $0.174 | 0.2 |
| B | $0.178 | 0.5 |
| C | $0.182 | 0.3 |
A put option on yuan expiring in one year costs $0.0019 per yuan and has an strike price of $0.178 per yuan.
What is the expected value of the receivables in one year with the put option hedge (in $)?
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Ebay Tips And Tricks To Increase Your Ebay Sales
Authors: Jessica Wilson
1st Edition
1774854015, 978-1774854013
