Company SLG is an exporter of retail fashion products from the U.S. to Italy, and has an

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Company SLG is an exporter of retail fashion products from the U.S. to Italy, and has an account receivable of100,000 due 180-days from now. The spot rate is $1.34/ and the 180-day forward rate is $1.15/. The U.S. interest rate is 2.3% p.a. and the Euro interest rate is 3% p.a.. The option data for contracts 180-days in the future in $/ is:

Strike: 1.20Call Price: 0.07Put Price: 0.05

What is the minimum dollar revenue your client will receive if she uses the option hedge? Remember to take account of the opportunity cost.

Posted Date: May 13, 2024 01:49 AM

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Company SLG is an exporter of retail fashion products from the U.S. to Italy, and has an

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