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Quasik Corporation will be paying 300,000 Canadian dollars (C$) in 90 days. Currently, a 90-day call option with an exercise price of $.75 and a premium of $.01 is available. Also, a 90-day put option with an exercise price of $.73 and a premium of $.01 is available. Quasik implements a currency option hedge.

Required:

Question: Assuming that the spot rate in 90 days is $.71, what is the total amount paid in US dollars?

Note: Provide support for your rationale.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91170765

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