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Singapore firm bought imported turbine from United States. The payment will be made for next three months. The amount of

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Singapore firm bought imported turbine from United States. The payment will be made for next three months. The amount of imports was $ 750,000. The chief financial officer of that company bought the call option to protect it import. The exercise or strike price is S$ 1.350/$, the call option premium is S$0.005 /$ and the future spot rate is S$1.415/$ . If the future spot rate is correctly predicted.



What should the firm do? And what future spot rate is the firm indifferent between the call option and spot market?

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Given Situation A Singapore firm has imported a turbine from the United States for 750 000 The payme View the full answer


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Financial Accounting

Financial Accounting

ISBN: 978-0078111020

7th Edition

Authors: LibbyShort

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Posted Date: April 03, 2023 00:46:21
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