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WASHI CO Sept 2018

This topic has 3 replies, 2 voices, and was last updated 1 week ago by John Moffat.

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April 7, 2021 at 2:16 pm #616255
cayz
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How are you sir. I was working on Washi Co question in BPP Revision kit. According to my understanding we are supposed to choose call option if the transaction to be hedged involves receiving money. However the answer chose put option thank you for your help.
April 7, 2021 at 3:26 pm #616267
John Moffat
Keymaster
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They are receiving euros and need to sell euros to convert to Japanese Yen.

The contract size is quote in euros and therefore they need the option to sell euros at a fixed rate, which is a put option.
April 8, 2021 at 9:58 am #616338
cayz
- Topics: 5
- Replies: 10
Thank you sir
April 8, 2021 at 3:27 pm #616462
John Moffat
Keymaster
- Topics: 57
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You are welcome 🙂
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