You live in the US. You plan to buy a car in three months in...
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You live in the US. You plan to buy a car in three months in GBP. The price for the car will be 25,000. The spot exchange rate is $1.45/, and the three-month forward rate is $1.42/. You can also buy the three-month call option with an exercise price of $1.40/ for the premium of $0.10 per . The three-month interest rate is 6% per annum in the United States and 3% per annum in UK. At what future spot price will you be indifferent between the forward and option market hedges?
Question 20 options:
$1.4200 per .
0.7584 per $.
0.6572 per $.
$1.5215 per .
$1.3185 per .
$0.6572 per .
PROVIDE ONE OPTION AS ANSWEER!
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