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A firm wants to use a CALL option to hedge CAD 10 million in payable...

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Finance

A firm wants to use a CALL option to hedge CAD 10 million in payable to Canadian firms. The premium is $.02. The exercise price is $1.20 per CAD. At the expiration date, the spot rate is $1.05. What is the total amount of dollars your company has to pay(after accounting for the premium paid)? (think about whether this company want to exercise its call option or not)

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