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Hi John,
The calculation of option premium payable €674250.the spot rate is $/€ 1.1585-1.1618. the company needs to sell € buy $. so it should be 674250×1.1585 while examiner used 674250×1.1618, why? later, he used forward 1.1559 x 5000(which was not hedged by options), not 1.1601. I get confused. Can you please help? Thanks.
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