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?

Amount received= $84,000

Explanation:

Canadian dollars received= $100,000

To get the value in dollars multiply by the spot rate.

Dollar value = 100,000* 0.85= $85,000

Premium paid= Amount * premium rate

Premium paid= 100,000* 0.01

Premium rate= $1,000

Amount received= Total amount received - Premium rate

Amount received= 85,000- 1,000

Amount received= $84,000

answer; i believe the answer is 40,600,000;

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know