L14a - Call Option Case with Inventory 11/26/20x1...

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Call Option Case with Inventory 11/26/20x1 12/31/20x1 01/15/20x2 Option Value11/26/20x1 12/31/20x1 01/15/20x2 Spot Rate $1.37 $1.30 $1.20 Time Value $3,300 $5,000 $0 Strike Price $1.43 $1.43 $1.43 Intrinsic Valu 0 0 0 Fair Value $3,300 $5,000 $0 Total $3,300 $5,000 $0 Both Transactions Involve 400,000Euros 11/26/20x1 Inventory 548,000 11/26/20x1 FX-Contract Value 3,300 Accounts Payable 548,000 Cash 3,300 12/31/20x1 Accounts Payable 28,000 12/31/20x1 FX-Contract Value 1,700 FX Gain 28,000 FX Gain 1,700 01/15/20x2 Accounts Payable 520,000 01/15/20x2 FX Gain 40,000 FX Loss 5,000 Cash 480,000 FX-Contract Value 5,000
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Put Option Case with Sales 11/26/20x1 12/31/20x1 01/15/20x2 Option Value11/26/20x1 12/31/20x1 01/15/20x2 Spot Rate $1.27 $1.29 $1.30 Time Value $1,700 $4,000 $0 Strike Price $1.24 $1.24 $1.24 Intrinsic Valu 0 0 0 Fair Value $1,700 $4,000 $0 Total $1,700 $4,000 $0 Both Transactions Involve 200,000Euros 11/26/20x1 Accounts Receiva 254,000 11/26/20x1 FX-Contract Value 1,700 Sales 254,000
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L14a - Call Option Case with Inventory 11/26/20x1...

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