51. A U.S. firm has sold an Italian firm €1,000,000 worth of product. In one year the U.S. firm gets paid. To hedge, the U.S. firm bought put options on the euro with a strike price of $1.65. They paid an option premium $0.01 per euro. If at maturity, the exchange rate is $1.60, A. The firm will realize $1,145,000 on the sale net of the cost of hedging.B. The firm will realize $1,150,000 on the sale net of the cost of hedging.C.The firm will realize $1,140,000 on the sale net of the cost of hedging.D. None of the above
52. Buying a currency option provides
53. Which of the following options strategies are internally consistent?
example, if you sell puts, you hope the price stays the same or goes up; if you buy calls, you hope the price goes up.8-38