A put option to sell 18000 at a strike price of 180

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Chap008

A put option to sell 18000 at a strike price of 180 100 is equivalent to A a from MAN man 4322 at Florida International University

62 .   To hedge a foreign currency receivable ,
A. buy call options on the foreign currency with a strike in the domestic currency .
B. buy put options on the foreign currency with a strike in the domestic currency .
C. sell call options on the foreign currency with a strike in the domestic currency .
D. sell put options on the foreign currency with a strike in the domestic currency .
63 .   A call option on £ 1,000 with a strike price of € 1,250 is equivalent to
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64 .   A call option to buy £ 10,000 at a strike price of $ 1.80 = £ 1.00 is equivalent to
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65 .   A put option to sell $ 18,000 at a strike price of $ 1.80 = £ 1.00 is equivalent to
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66 .   XYZ Corporation , located in the United States , has an accounts payable obligation of ¥ 750 million payable in one year to a bank in Tokyo . The current spot rate is ¥ 116/$1.00 and the one year forward rate is ¥ 109/$1.00 . The annual interest rate is 3 percent in Japan and 6 percent in the United States . XYZ can also buy a one - year call option on yen at the strike price of $ 0.0086 per yen for a premium of 0.012 cent per yen . Assume that the forward rate is the best predictor of the future spot rate . The future dollar cost of meeting this obligation using the option hedge is
A. $ 6,450,000 .
B. $ 6,545,400 .
C. $ 6,653,833 .
D. $ 6,880,734 .
67 .   Your U.S. firm has a £ 100,000 payable with a 3 - month maturity . Which of the following will hedge your liability ?
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68 .   Your U.S. firm has a £ 100,000 payable with a 3 - month maturity . Which of the following will hedge your liability ?
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69 .   Suppose that the exchange rate is € 1.25 = £ 1.00 . Options ( calls and puts ) are available on the London exchange in units of € 10,000 with strike prices of £ 0.80 = € 1.00 . Options ( calls and puts ) are available on the Frankfurt exchange in units of £ 10,000 with strike prices of € 1.25 = £ 1.00 . For a U.K. firm to hedge a € 100,000 payable ,
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70 .   Suppose that the exchange rate is € 1.25 = £ 1.00 . Options ( calls and puts ) are available on the London exchange in units of € 10,000 with strike prices of £ 0.80 = € 1.00 . Options ( calls and puts ) are available on the Frankfurt exchange in units of £ 10,000 with strike prices of € 1.25 = £ 1.00 . For a U.K. firm to hedge a € 100,000 receivable ,
A. buy 10 call options on the euro with a strike in pounds sterling .
B. buy 8 put options on the pound with a strike in euro .
C. buy 10 put options on the euro with a strike in pounds sterling .
D. buy 8 call options on the pound with a strike in euro .
E. both a ) and b )
F. both c ) and d)
65. A put option to sell $18,000 at a strike price of $1.80 = £1.00 is equivalent to A.a call option to buy £10,000 at a strike price of $1.80 = £1.00.B. a call option on $18,000 at a strike price of $1.80 = £1.00.C. a put option on £10,000 at a strike price of $1.80 = £1.00.D. none of the above
Topic: Currency Options Contracts8-41
Chapter 08 - Management of Transaction Exposure66. XYZ Corporation, located in the United States, has an accounts payable obligation of ¥750 million payable in one year to a bank in Tokyo. The current spot rate is ¥116/$1.00 and the one year forward rate is ¥109/$1.00. The annual interest rate is 3 percent in Japan and 6 percent in the United States. XYZ can also buy a one-year call option on yen at the strike price of $0.0086 per yen for a premium of 0.012 cent per yen. Assume that the forward rate is the best predictor of the future spot rate. The future dollar cost of meeting this obligation using the option hedge is
Topic: Currency Options Contracts67. Your U.S. firm has a £100,000 payable with a 3-month maturity. Which of the following will hedge your liability?
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Topic: Currency Options Contracts68. Your U.S. firm has a £100,000 payable with a 3-month maturity. Which of the following will hedge your liability?
Topic: Currency Options Contracts8-42
Chapter 08 - Management of Transaction Exposure69. Suppose that the exchange rate is €1.25 = £1.00. Options (calls and puts) are available on the London exchange in units of €10,000 with strike prices of £0.80 = €1.00.Options (calls and puts) are available on the Frankfurt exchange in units of £10,000 with strike prices of €1.25 = £1.00.For a U.K. firm to hedge a €100,000 payable, A. buy 10 call options on the euro with a strike in pounds sterling.B. buy 8 put options on the pound with a strike in euro.C. sell 10 call options on the euro with a strike in pounds sterling.D. sell 8 put options on the pound with a strike in euro.E.both a) and b)F. both c) and d)
Topic: Currency Options Contracts

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