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    This post provides the correct answer for the total pd.

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    A U.S. corporation has purchased currency call options to hedge a 70,000 pound payable. The premium is $.02 and the exercise price of the option is $.50. If the spot rate at the time of maturity is $.65, what is the total amount paid by the corporation if it acts rationally? (Please ignore the time value of premium)

    33,600
    46,900
    36,400
    44,100

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    https://brainmass.com/business/business-law/provides-correct-answer-total-pd-403962

    Solution Preview

    A U.S. corporation has purchased currency call options to hedge a 70,000 pound payable. The premium is $.02 and the exercise price of the option is $.50. ...

    Solution Summary

    The solution provides the correct answer with supporting calculations to determine the total amount paid by the corporation if it acts rationally.

    $2.19

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