Question: 4 PLS You are doing some consulting work for a communications firm in Thailand. You will be paid $479,511 (Thai Baht) seven months from now


4 PLS You are doing some consulting work for a communications firm in Thailand. You will be paid $479,511 (Thai Baht) seven months from now when the work is done. In order to hedge against an unfavorable exchange rate when you get paid, you decide to purchase a put option with a striking price of B35.31/$. The premium rate is 0.007 US cents per Thai Baht. Seven months from now, the exchange rate is $36.21/$. How much better off (in terms of US Dollars) are you AT THE MARGIN if you exercise the option versus if OF you were to exchange your paycheck on the spot market on the day you get paid? Enter a negative number if you're worse off. Round to two decimal places
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
