Seattle Best Company (a U.S. based firm) negotiates a conditional currency call options with Goldman Sachs Bank USA to h
Posted: Sat Nov 27, 2021 5:19 pm
Seattle Best Company (a U.S. based firm) negotiates a
conditional currency call options with Goldman Sachs Bank USA to
hedge its accounts payable of 4 million British pounds due on
October 31. Seattle Best Company will only exercise its option on
the due date. The terms of the conditional currency call options
are as follows: K (exercise price) = $1.23 per pound, Trigger =
$1.21 per pound, premium = $0.06 per pound, expiration date =
October 31. If the spot rate on the due date, i.e., October 31, is
$1.25 per pound, what is the amount of U.S. dollar Seattle Best
Company expects to pay for its 4 million British pounds?
conditional currency call options with Goldman Sachs Bank USA to
hedge its accounts payable of 4 million British pounds due on
October 31. Seattle Best Company will only exercise its option on
the due date. The terms of the conditional currency call options
are as follows: K (exercise price) = $1.23 per pound, Trigger =
$1.21 per pound, premium = $0.06 per pound, expiration date =
October 31. If the spot rate on the due date, i.e., October 31, is
$1.25 per pound, what is the amount of U.S. dollar Seattle Best
Company expects to pay for its 4 million British pounds?