A firm wants to use an option to hedge 12.5 million in receivables from New Zealand firms. The premium is £0.01. The exercise price is £0.55. If the option is exercised, what is the total amount of pounds received (after accounting for the premium paid) ?
A) £125,000
B) £6,875,000
C) £6,375,000
D) £6,750,000
E) None of the above
Correct Answer:
Verified
Q32: Which of the following is correct?
A) The
Q40: A European option can only be exercised
Q57: The premium on a euro put option
Q58: The spot rate for the Singapore dollar
Q59: A put option on dollars has a
Q61: The purchase of a currency put option
Q62: The 90-day forward rate for the euro
Q63: A UK corporation has purchased currency call
Q77: If an investor who previously sold futures
Q104: European currency options can be exercised _;
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