Maria Gonzalez is the chief financial officer of Ganado. She has just concluded negotiations for the sale
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Maria Gonzalez is the chief financial officer of Ganado. She has just concluded negotiations for the sale of a turbine generator to Regency, a British firm, for £1,000,000. The sale is made in March with payment due three months later in June. Maria could cover her £1,000,000 exposure by purchasing a put option. Maria could purchase from her bank a 3-month put option on £1,000,000 at an at-the-money (ATM) strike price of $1.78/£ with a premium cost of 1.40%. The spot rate is $1.7640/£. What is the total cost of option?
Related Book For
International Business The Challenge of Global Competition
ISBN: 978-0077606121
13th edition
Authors: Donald Geringer Ball, J. Michael Geringer, Jeanne M. McNett, Michael S. Minor
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