A Japanese Exporter Has a €1,000,000 Receivable Due in One

question 66

Multiple Choice

A Japanese exporter has a €1,000,000 receivable due in one year.Estimate the cost today of an options strategy that will eliminate exchange rate risk. $\begin{array}{llll}\text { Listed Options }\\&\text { Strike } & \text { Puts } &\text { Calls } \\\text { Euro€62,500 } & \$ 1.25=€ 1.0 C & \$ 0.0075 \text { per } € & \$ 0.01^{ per€ } \\\text { Yen?12,500,000 } & \$ 1.00=¥ 10 C & \$ 0.0075 \text { per } ¥ 100 & 0.010^{ per ¥10 }\end{array}$

• A)$20,000
• B)$5,000
• C)$12,500
• D)none of the options

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Definitions:

Long-Term Stress

Long-term stress involves chronic exposure to stressors that can lead to significant physical and psychological health issues, affecting overall well-being and functioning.

Growth Spurt

A rapid increase in physical growth, typically experienced during puberty, characterized by accelerated growth in height and weight.

Puberty

The series of biological developments that transforms individuals from a state of physical immaturity into one in which they are biologically mature and capable of sexual production.

Gender Differences

Variations in characteristics, behaviors, or attitudes between males and females.