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Richard Inc., an American firm, will receive a payment of 792,000 Swiss francs (CHF) in...

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Finance

Richard Inc., an American firm, will receive a payment of 792,000 Swiss francs (CHF) in 60 days. The spot rate for a Swiss franc is 0.8536 US dollars while the 60-day forward rate is 0.753 US dollars. Currently, a 60-day European call option for a Swiss franc with a strike price of USD 0.9971/CHF costs USD 0.05. A 60-day European put option for a Swiss franc with a strike price of USD 0.9646/CHF costs USD 0.08. If the future spot rate in 60 days is USD 1.0287/CHF, determine the net amount of the receipt in USD if the company uses option hedging and acts rationally.

a.

751,370

b.

814,730

c.

800,158

d.

533,016

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