Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. currency call options were purchased by a u.s.mnc

Currency call options were purchased by a U.S.MNC to hedge a 80,000 pound () payable....

90.2K

Verified Solution

Question

Finance

image
Currency call options were purchased by a U.S.MNC to hedge a 80,000 pound () payable. The premium is $0.02 and the exercise price of the option is $0.73. If the spot rate at the time of maturity is $0.76, what is the total amount paid by the corporation if it takes a rational action? Select one: O a $62,400 O b. $55,500 Oc$60,000 Od $60,800 If the euro's interest rate is 2% and the U.S. interest rate is 4% (assuming interest rate parity) and then the euro's interest rate increases to 3% while the US, interest rate remains the same the euro's forward_will In order to maintain interest rate parity Select one O a discount increase Ob discount decrease Oc premium decrease Od premium increase

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

General Management
1.2K views

Use a social media platform of your own choice to illustrate how value creation occurs on...

Advance Math
1.2K views

R is included in (R-{0} )x(R-{0} ) R = {(x,y) : xy >0} Show that R is...

Biology
1.2K views

Some of the lipid groups appear similar but changing a few components significantly alters their...

Algebra
1.2K views

Diverges The answer above is NOT correct Sum Diverges Find the sum of the following...

Algebra
1.2K views

CA Trea Homework 11 6 Write an expression for each of the following then evaluate...

Accounting
1.2K views

1 Part 1 of 3 Problem 18-4A Break-even...

Accounting
1.2K views

Pre-assignment Practice Chapter 11 17. Division X manufactures and sells a standard relay that could...

Accounting
1.2K views

06/06/2024 Adi Soyadi SINAV KAIDI grenci No Blm ...

Accounting
1.2K views

Swifty Limited, which uses a perpetual inventory system, purchased inventory costing $24,400 on February 1...

Accounting
1.2K views

Question 13 (1 point) A description should accompany each entry made in the general journal...

Finance
1.2K views

You are making a fixed payment loan of 400,000 yuan for 5 years (60 monthly...

Accounting
1.2K views

The bookkeeper for Jordans Country Music Bar left this incomplete balance sheet. Jordans working capital...