What is the net amount received by the corporation

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U.S.A. Incorporated has purchased currency put options to hedge a 200,000 Canadian dollar (C$) receivable. The premium is $.03 and the exercise price of the option is $.75

a. If the spot rate at the time of maturity is $.85, what is the net amount received by the corporation if it acts rationally?

b. If the spot rate at the time of maturity is $.70, what is the net amount received by the corporation if it acts rationally?

Reference no: EM132724275

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