Find strike price and maturity

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You are living in Canada and are planning to buy a house in one year, which will require a down payment of CAD$40,000. Currently you have an investment of 1000 shares of stock ABC in US market. Current stock price is US$30. Current exchange rate is CAD$1.24 per 1 US dollar. You plan to use a stock option plus a currency option to guarantee that you will receive at least CAD$40,000 in one year after you sell the stock and convert the proceeds into Canadian dollars. Please describe the stock option and currency option you choose and specify the type of the option (call or put), the strike price and maturity. Please explain whether you take long or short position in these options and find out your cash flow in one year. (10 points)

Reference no: EM133062173

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