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Use the following information to answer this question: NewMoon Corporation, located in the United States, has an accounts payable obligation of 100 million payable in
Use the following information to answer this question: NewMoon Corporation, located in the United States, has an accounts payable obligation of 100 million payable in one year to a bank in Rome. The spot rate is $1.20 = 1.00. After one year the spot rate turns out to be $1.3 = 1.00.What is the cost of meeting this obligation if the company buys call options on 100 million? The premium on oneyear call option on yen is 0.05 dollars per euro. The exercise price of this option is $1.33 = 1.00.(Choose the closest number.)
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