Foreign exchange management risk – Options

Hi John,

As per Kaplan study textbook, they have a different calculation on the final net cash flow on the foreign exchange option:

Receive/payment under options +/- under/over hedged + premium

When I tried to apply this to the your notes Ch.19 example 3, I got the follows:

Payment under options: 22 x 31250 = ?687,500
Over hedged = $1,000,000 – (?687500 x 1.475) = $14,063, translate at spot /1.412 =?9,960
Premium = ?5,556
Net payment = ?687,500 – ?9,960 + ?5,556 = ?683,096

which is different to the answer (?683,128), is this correct?

Thank you.