A UK corporation has purchased currency call options to hedge a 70,000 dollar payable. The premium is
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Question:
A UK corporation has purchased currency call options to hedge a 70,000 dollar payable. The premium is 0.015 and the exercise price of the option is 0.54. If the spot rate at the time of maturity is 0.59, what is the total amount paid by the corporation if it acts rationally?
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