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Determining the cost of interest payment

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ABC Inc. has CAD20,000,000 interest payment due on September 19th and is concerned about a possible CAD appreciation. The premium for September 19th call option on Canadian dollar is $0.04, and the strike price is $0.80. Assume that on September 19 the spot rate for the Canadian dollar rose to $0.92. What is the USD cost of interest payment for ABC Inc?

Reference no: EM1334070

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Determining the cost of interest payment : ABC Inc. has CAD20,000,000 interest payment due on September 19th and is concerned about the possible CAD appreciation. Find out the USD cost of interest payment for ABC Inc?
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