What is the net amount received by the corporation

Assignment Help Finance Basics
Reference no: EM13303711

A U.S. corporation has purchased currency put options to hedge a 100,000 Canadian dollar (C$) receivable. The premium is $.01 and the exercise price of the option is $.75. If the spot rate at the time of maturity is $.85, what is the net amount received by the corporation if it acts rationally?

Reference no: EM13303711

Questions Cloud

What are the similarities in wan''s and lan''s : Compare WAN's and LAN's. What are the similarities, what are the differences. What special considerations must you remember when planning a WAN
Would ford offer a higher or lower expected return : Suppose that the Treasury bill rate were 6% rather than 4%. Assume that the expected return on the market stays 10%.
By what distance is the depth of the water lowered : A sealed vertical cylinder of radius R and height h = 0.542 m is initially filled halfway with water, and the upper half is filled with air. By what distance is the depth of the water lowered
What is the standard deviation of returns : A poorly diversified portfolio has a standard deviation of 20%. What can you say about its beta?
What is the net amount received by the corporation : what is the net amount received by the corporation if it acts rationally?
Compute the output voltage of the secondary : A transformer has 350 turns and 94 turns for the primary and secondary respectively. what is the output voltage of the secondary
Show how a monopoly firm behaves in short run : Show how a monopoly firm (industry) behaves in short run (using any practical example: emphasize on output, price and average cost).
Find the rate at which thermal energy is appearing : A coil with an inductance of 1.8 H and a resistance of 6.7 ? is suddenly connected to a resistanceless battery with an ? = 80.0 V. What is the rate at which thermal energy is appearing
Explain network communication simulation using vector : Network Communication Simulation using multidimensional vector. We want to simulate the communication cost between different nodes in a network. How to model the network nodes and communication cost

Reviews

Write a Review

Finance Basics Questions & Answers

  All sales are estimated to be bad debts

Farris estimates that it will collect 30% in the month of sale, 50% in the month after the sale, and 18% in the second month following the sale. Two percent of all sales are estimated to be bad debts. How much are Farris Co.'s budgeted cash rec..

  How superior investment performance can be established

Explain why this should be the case, being sure to describe the similarities and differences between the CAPM and APT. Also, using these theories, explain how superior investment performance can be established.

  The change in net operating working capital

Vinny's Overhead Construction had free cash flow during 2012 of $25.4 million.

  Find the ebit-eps indifferent point with the two plans

The common stock will be sold at RM10.00 per share and preferred stock will be sold at RM50.00 per share. Dividend for preferred stock would be RM2.00 per share. The corporate tax rate is 26 percent.

  What is the future value of this cash flow stream

Does the office renovation and subsequent lease agreement appear to be a good investment investment for the company? (Hint: Compare the cost of renovation with the present value of the lease payments. Use a 10 percent discount rate for the analysi..

  What is the percentage margin the company will realize

If the UK pound appreciates against the USD to an exchange rate of $2.15/£, and Jaguar has not hedged against currency changes, what is the percentage margin the company will realize given the new exchange rate?

  Social security reform became law

Assume that the following Social Security reform became law; All current Social Security recipients will continue to earn their profits, but no increase will be made other than cost of living adjustments;

  What is the gain or loss on the futures contract

what is the gain or loss on the futures contract? (Assume a $1,000 par value, and round to the nearest whole dollar.)

  How might that influence the decision

If Billy and his agent think tax rates are likely to be higher in the future, how might that influence the decision?

  Determine the net present value of the laser

Determine the net present value of the laser if the intial investment increases to $250,000?

  Which will lower the overall expected return of this stock

A stock is expected to return 13% in a boom, 10% in a normal, and 3% in a recessionary economy. Which will lower the overall expected return of this stock?

  What is the market value of kurz assets

What is the market value of Kurz's assets (including any tax shields) just after the debt is issued, but before the shares are repurchased?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd