QWER Corporation will be receiving 400,000 Canadian dollars (C\\$0 in 90 days. Currently, a 90day...

90.2K

Verified Solution

Question

Finance

image QWER Corporation will be receiving 400,000 Canadian dollars (C\\$0 in 90 days. Currently, a 90day call option with an exercise price of \\( \\$ 0.79 \\) and a premium of \\( \\$ 0.02 \\) is available. Also, a 90 day put option with an exercise price of \\( \\$ 0.76 \\) and a premium of \\( \\$ 0.02 \\) is available. QWER plans to purchase options to hedge its receivable position. Assuming that thew spot rate in 90 days is \\( \\$ 0.75 \\), what is the net amount received from the currency option hedge

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