Question: Microsoft is bidding for a contract to sell computers to South Africa for 1 7 m South African Rands ( ZAR ) . To hedge
Microsoft is bidding for a contract to sell computers to South Africa for m South African Rands ZAR To hedge its transaction exposure, MSFT buys put options with strike price of $ ZAR and put premium of $ ZAR.
If at expiration the spot exchange rate is $ ZAR how many dollars will Microsoft receive for winning and fulfilling the contract factoring in the hedge position
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