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Quasik Ltd Will Be Receiving $300,000 in 90 Days

Question 3

Multiple Choice

Quasik ltd will be receiving $300,000 in 90 days. Currently, a 90-day call option with an exercise price of £0.55 and a premium of £0.01 is available. Also, a 90-day put option with an exercise price of £0.54 and a premium of £0.01 is available. Quasik plans to purchase options to hedge its receivable position. Assuming that the spot rate in 90 days is £0.51, what is the net amount received from the currency option hedge?


A) £150,000
B) £159,000
C) £168,000
D) £162,000

Correct Answer:

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