A firm wants to use an option to hedge 12.5 million in receivables from New Zealand firms. The premium is $.03. The exercise price is $.55. If the option is exercised, what is the total amount of dollars received (after accounting for the premium paid) ?
A) $6,875,000
B) $7,250,000
C) $7,000,000
D) $6,500,000
E) None of these are correct.
Answer Key
Correct Answer:
Verified
Q145: A U.S. firm is bidding for a
Q146: Which of the following is not true
Q147: Kalons, Inc. is a U.S.-based MNC that
Q148: A put option on British pounds has
Q149: Johnson, Inc., a U.S.-based MNC, will need
Q151: You are a speculator who sells a
Q152: Which of the following does not represent
Q153: Currency futures contracts sold on an exchange
Q154: Graylon, Inc., based in Washington, exports products
Q155: Which of the following is correct?
A) The
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents