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What is the expected value of the cash

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Viner Co., an Australian company, has developed the following probability distribution for the spot rate of the Chinese yuan (CNY) against the Australian dollar (A$) in six months to buy put options on CNY1.35 million with an exercise price of A$0.3098 and a premium of A$0.0318.

  • A$0.2252 [32 per cent probability]
  • A$0.4471 [34 per cent probability]
  • A$0.5467 [(100-32-34) per cent probability]

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

Reference no: EM133004560

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