U.S. dollar/Japanese Yen. What would be the premium expense, in home currency, for a Japanese firm to purchase an option to sell 700,000 U.S. dollars, assuming the initial values listed in this table:

Pricing Currency Options on the Japanese Yen A Japanese firm wishing to buy A U.S.-based firm wishing to buy or sell dollars (the foreign currency) or sell yen (the foreign currency) Variable Value Variable Value Spot rate (domestic/foreign) S0 JPY 105.84 S0 $ 0.0095 Strike rate (domestic/foreign) X JPY 100.12 X $ 0.01 Domestic interest rate (% p.a.) rd 0.089 % rd 1.456 % Foreign interest rate (% p.a.) rf 1.456 % rf 0.089 % Time (years, 365 days) T 1 T 1 Days equivalent 365 365 Volatility (% p.a.) s 12 % s 12 % Call option premium (per unit fc) c JPY 7.336 c $ 0.0003 Put option premium (per unit fc) p JPY 3.045 p $ 0.0007 (European pricing) Call option premium (%) c 6.931 % c 3.09 % Put option premium (%) p 2.877 % p 7.302 %

The premium expense, in home currency, is