Would hopkins prefer put option hedge to no hedge

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Reference no: EM131175504

Hopkins Co. transported goods to Switzerland and will receive 2 million Swiss Francs in 3 months. It believes the 3-month forward rate will be an accurate forecast of future spot rate.

The 3-month forward rate of Swiss Franc is $.68.

A put option is available with an exercise price of $.69 and a premium of $.03. Would Hopkins prefer put option hedge to no hedge?

Reference no: EM131175504

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