Evaluate the benefits and costs from the perspective

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Reference no: EM131623786

XYZ plc pays for imports in dollars and has been offered the following quotes for options on the dollar:

Strike price of dollar in pence Call premium Put premium

1 year 2 years 1 year 2 years

66 4.8 10.0 4.5 4.0

67 4.5 9.5 5.1 4.4

a. Using these figures illustrate and evaluate the benefits and costs from the perspective of a multinational company of a range forward or collar arrangement between the multinational company and its banks.

Reference no: EM131623786

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