Exercise price of option, A U.S. corporation has bought currency call options to hedge, Finance Basics

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Exercise price of option

A U.S. corporation has bought currency call options to hedge 70,000 pound payable. The premium is 2 cents for each GBP and the exercise price of option is 1.6500 (USD per 1 GBP). If the spot rate at the time of maturity is 1.7100 USD per GBP, what is the net profit the company gets from the option hedge?

$3,600.

$4,900

$2,800

$1,400

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Finance Basics: Exercise price of option

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Finance Basics: Exercise price of option

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Recent Questions Asked Finance Basics

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Request for Solution File

Ask an Expert for Answer!!

Finance Basics: Exercise price of option

Reference No:- TGS0875353

Recent Questions Asked Finance Basics

Q : Concept of time value of money

Q : Futures contract price and spot rates

Q : Find out the activity level

Q : Budgeted fixed overhead

Q : Exercise price of option

Q : Euro forward contract

Q : Month interest upon the overdue balance

Q : Find out the amount of the firm ebit

Q : Calculate total dollar return on investment

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