ABC Inc. has CAD20,000,000 interest payment due on September 19th and is concerned about a possible CAD

Fantastic news! We've Found the answer you've been seeking!

Question:

ABC Inc. has CAD20,000,000 interest payment due on September 19th and is concerned about a possible CAD appreciation. The premium for September 19th call option on Canadian dollar is $0.04, and the strike price is $0.80. Assume that on September 19 the spot rate for the Canadian dollar rose to $0.92. What is the USD cost of interest payment for ABC Inc. ?( Ignore the time value of the option premium) .

Posted Date: May 15, 2024 11:45 AM

See More Questions

Dickens, Kristen, is enrolled as a doctoral student in the Counselor Education at the University of New Orleans. She is a registered counselor intern in the state of Louisiana and works at a...
A petrochemical firm will purchase 100,000 barrels of oil in 4 months and is concerned about the uncertainty in the price it will have to pay. The firm can use either forward contract or options on...
Question 1 Anytime Best Coffee (ABC) manufactures and sells packets of coffee capsules for use in coffee machines through their website. Management is concerned about a projected drop in the number...
Differentiate f(x) = log 10 (2 + sin x).
Refer to Exercise 10 (too much information). The estimated regression equation turned out to be y = 66 6.8x. Show the 95% prediction interval estimate of the confidence score for a particular...
The traveling salesperson problem (TSP) can be solved via the minimum spanning tree (MST) heuristic, which is used to estimate the cost of completing a tour, given that a partial tour has already...
Northern Company regularly sells its only product for $$34$ per unit and has a 25% profit on each sale. The company has accepted a special order for a number of units, the production of ax which...
1. All of the following assets are capital assets, except: a. A personal automobile b. IBM stock c. Business inventory d. Personal furniture e. An individuals stamp collection 2. Which of the...
Why is it always advisable in taking over management of a property to review all existing policies? The TREC requires an annual review. New management needs to establish authority by throwing out old...
Consider the function h(x)=- Complete the table. 8 x -8 -4 -2 -1 h(x) 1/2 0 Use the table to graph the function. Analyze the function and the corresponding table and graph. Describe the domain,...
XY earns $2 per share. It reinvests 40 percent (b) of it earnings at a return of 20 percent (R) per year/ The required rate of return is 15% a) What is the price of the stock? b) Its premium for...
How is the COVID-19 pandemic relevant to Environmental Psychology? Give an example that links health/well-being, environmental justice, and sustainability. (One example explaining the links to all...
Of the many unique and unusual animals that inhabit the rainforests of South America, including howler monkeys, freshwater dolphins, and deadly piranhas, one stands out because of its mastery of...
The following information was obtained for the KJM Co. Assume U.S.GAAP: Cash payments for interest Retirement of common stock Cash payments to suppliers Purchase of land Sale of equipment Payments of...
M9.3 A travel agency is offering a package cruise for $4000 to a honeymoon couple. There is a 30% chance that the agency is selling a low-amenities cruise in place of a first-class cruise. The...
A poll was taken of 100 college freshmen to determine whether chocolate or vanilla was the preferred ice cream flavor. It was expected that 25% would prefer chocolate and 75% would prefer vanilla....
Using the theoretical sampling strategy, how many samples of size 4 (n = 4) can be drawn from a population of size: (a) N = 5? (b) N = 8? (c) N = 16? (d) N = 50?
For each of the following threats, give a control that might reduce exposures: a. Pirated software b. Violation of the licensing conditions pertaining to a proprietary database c. Employee use of an...
Which of the following is not a component of the emergency plan? a. Personnel to be notified upon the occurrence of a disaster b. Evacuation procedures c. Restart priorities d. Equipment shutdown...
Briefly distinguish between viruses and worms. List two controls over viruses and worms (one for viruses and one for worms) that security administrators might implement to reduce exposures.

ABC Inc. has CAD20,000,000 interest payment due on September 19th and is concerned about a possible CAD

Question:

Expert Answer:

Strike Price is 080 Spot Price is 092 The call option wil... View the full answer

Students also viewed these finance questions