A firm has a payable of SFr 1,200,000.00. They hedge this exposure with a call...
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A firm has a payable of SFr 1,200,000.00. They hedge this exposure with a call option with a strike price of $1.2917/SFr. The premium of the option is $0.1292. If at the time of payment the spot price ends up equal to $1.2529/SFr. What is the firm's total cost?
(a) $1,658,520 (b) $1,705,080 (c) $1,503,480 (d) $1,348,440
The answer is (a) $1,658,520, need help with the math.
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