Cost of Interest Payment Assignment | Homework For You
May 26th, 2020
ABC Inc., a US multinational, 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 ABC decides to use the call option. On September 19th the spot rate for the Canadian dollar increases to $0.92. What would be the USD cost of interest payment for ABC Inc. ?
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(Ignore the time value of premium)
a)20,000,000
b)16,800,000
c)15,400,000
d)12,000,000. Get Finance homework help today