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=) The strike price for a March expiring contract is currently AED 2.65/ CADS with a premium of AED 0.05/CADS. Assuming 1 contract on CADS option is worth CADS 150,000, estimate the profit and loss under each of the following possible future exchange rates between the UAE dirham and Canadian dollar for a long call FX optic FX rate (AED/€) 1 2.5 Profit/Loss (AED)

=) The strike price for a March expiring contract is currently AED 2.65/ CADS with a premium of AED 0.05/CADS. Assuming 1 contract on CADS option is worth CADS 150,000, estimate the profit and loss under each of the following possible future exchange rates between the UAE dirham and Canadian dollar for a long call FX optic FX rate (AED/€) 1 2.5 Profit/Loss (AED)

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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have been recruited by Sustainable Lambs LLC, which is based in Dubai, as the international finance analyst. The company is importing mostly from Canada, and you are interested in using foreign currency (FX) options to manage the foreign currency exposure Given a contract with a transaction value of Canadian dollars (CADS) 150,000 which is expected to be paid in 3 months: (c) The strike price for a March expiring contract is currently AED 2.65/ CADS with a premium of AED 0.05/CADS. Assuming 1 contract on CADS option is worth CADS 150,000, estimate the profit and loss under each of the following possible future exchange rates between the UAE dirham and Canadian dollar for a long call FX option: FX rate (AED/€) 1 2.5 2.65 2.7 3.5 4 Profit/Loss (AED)
Transcribed Image Text:have been recruited by Sustainable Lambs LLC, which is based in Dubai, as the international finance analyst. The company is importing mostly from Canada, and you are interested in using foreign currency (FX) options to manage the foreign currency exposure Given a contract with a transaction value of Canadian dollars (CADS) 150,000 which is expected to be paid in 3 months: (c) The strike price for a March expiring contract is currently AED 2.65/ CADS with a premium of AED 0.05/CADS. Assuming 1 contract on CADS option is worth CADS 150,000, estimate the profit and loss under each of the following possible future exchange rates between the UAE dirham and Canadian dollar for a long call FX option: FX rate (AED/€) 1 2.5 2.65 2.7 3.5 4 Profit/Loss (AED)
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