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?

Answer rating: 100% (QA)

Given Situation A Singapore firm has imported a turbine from the United States for 750000 The paymen... View the full answer