Fieldman National is a U.S. multinational that just sold C$1,000,000 of goods on account, due in 30 days to a Canadian customer. The spot exchange rate is $0.755/C$. Fieldman wants to hedge the account receivable with an OTC call option with a strike price of $0.750/C$. The option premium is 0.40 percent, and the 30-day periodic rate in the U.S. is 0.30 percent. If the spot exchange rate in 30 days is $0.766/C$, what is the total receipt from the account receivable (including the cost of the option)?

Question

Quizplus · Accepted Answer

The Answer of Fieldman National is a U.S. multinational that just sold C$1,000,000 of goods on account, due in 30 days to a Canadian customer. The spot exchange rate is $0.755/C$. Fieldman wants to hedge the account receivable with an OTC call option with a strike price of $0.750/C$. The option premium is 0.40 percent, and the 30-day periodic rate in the U.S. is 0.30 percent. If the spot exchange rate in 30 days is $0.766/C$, what is the total receipt from the account receivable (including the cost of the option)?

Fieldman National Is a U