Omega Engineering Co 6 3 points Omega Engineering Co is a UK based manufacturer which imports part finished components from the USA. The firm's standard terms for At what rate will the bank sell $ for immediate delivery? payables is 60 days and their normal policy is to hedge significant C $1.58/E foreign currency positions. It is the 15th April and in 60 days' time the company will need to pay US$2.75 million in settlement for imported O $1.54/E components. Omega Engineering Co's bank has provided the following $1.52/E quotations: O Current spot rate $/E: $1.54 - 58 $1.59/E 60-day forward rate $/E: $1.52 - 59 60-day Sterling interest rate: 3.25% per annum 60-day $U.S. interest rate: 2.50% per annum PHILADELPHIA SE E/$ OPTIONS E31,250 (Cents per E) Strike CALLS PUTS Price Apr May Jun Apr May Jun $1.55 1.23 1.82 2.32 0.63 1.72 1.77 $1.56 0.75 1.34 1.90 1.07 1.67 2.23 $1.57 0.41 0.98 1.51 1.66 2.21 2.70 Previous day's vol., Calls 0 Puts 0 Prev day's open int Calls 871 Puts 701 The Sterling June futures contract is trading at $1.55. Note:- the Sterling contract size is E62,500 and the value of 1 tick is $6.25. Ignore any trading costs. Omega Engineering does not have any US$ balances at the present time but has borrowing capacity in both US Dollars and Sterling. Previous Next