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5. A U.S. firm expects receivables of €150,000 in three months. The U.S. firm purchases a...

5. A U.S. firm expects receivables of €150,000 in three months. The U.S. firm purchases a put option on the euros. The strike price is $1.06/€ and the premium is $.04/€. What is the total dollar amount received from the euro receivable if the spot rate in three months is (Multiply any $/€ amount by €150,000)

 $1.00/€

 $1.05/€

 $1.10/€

 $1.15/€

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Answer #1

L=Lapse Action Final price premium Net E - Exercise Spike price Spot price aftu 3 monity 11.06 1 1.06 1.05 1.10 11.06 1.15 E

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