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TION 12 Perfect Purchase is a U.S. electronics retailer importing consumer electronics from Japan. The company will need 19 million yen() in one year to
TION 12 Perfect Purchase is a U.S. electronics retailer importing consumer electronics from Japan. The company will need 19 million yen() in one year to pay ts suppliers The firm expects the following exchange rate scenarios and probabilities: Scenario Probability A B Spot rate in one year $0.0074 $0.0082 S0.009 0.1 0.5 10.4 A call option on yen expiring in one year costs $0.0005 per yen and has an exercise price of $0.0082 per yen. What is the total cost of hedging your payables with a call option (in 5)? O $164,170 O $158.430 O $163,780 O $ 162,490
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