In 90 days, Kansas City Corp. expects to receive 880,000 Can…
In 90 days, Kansas City Corp. expects to receive 880,000 Canadian dollars (C$) from an outstanding account receivable. The company finds a 90-day call option with an exercise price of $0.90 and a premium of $0.04 as well as a 90-day put option with an exercise price of $0.81 and a premium of $0.03. Kansas City Corp. wants to use options to hedge. If the spot rate in 90 days is $0.73, what is the net amount received (including the option premium) using the currency option hedge?