What is expected value of cash

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Wesfarmers has developed the following probability distribution for the spot rate of the Indian rupee (INR) against the Australian dollar (A$) in six months to buy call options on INR1.11 million with an exercise price of A$0.3050 and a premium of A$0.0340.

· A$0.2268 [40 per cent probability]

· A$0.4464 [33 per cent probability]

· A$0.5703 [(100-40-33) per cent probability]

What is the expected value of the cash to be paid in A$ for the call option hedge? (enter the whole number without sign and symbol)

Reference no: EM133305652

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