JKL Corporation will need 400,000 Canadian dollars (C$) in 90 days to cover a payable position. Currently, a 90-day call option with an exercise price of $.77 and a premium of $.015 is available. Also, a 90-day put option with an exercise price of $.77 and a premium of $.012 is available. JKL plans to purchase options to hedge its payable position. Assuming that the spot rate in 90 days is $.73, what is the cost of satisfying this obligation as a result of this transaction?
Get Answers For Free
Most questions answered within 1 hours.