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Firm realize fromthe sale net of the cost of hedging

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A U.S. firm has sold an Italian firm €1,000,000 worth of product. In one year theU.S. firm gets paid. To hedge, the U.S. firm bought put options on the euro with astrike price of $1.65. They paid an option premium $0.01 per euro. If the spotexchange rate is $1.60 at maturity, how much in dollar will the firm realize fromthe sale net of the cost of hedging?

Reference no: EM131092205

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