D. There is a receivable in Mexican pesos of 50 million. Presuppose the Spot rate now, spot rate in one year and forward rate now are 25, 24 and 22 MXN/$, respectively. The premium for calls of an exercise price of MXN/$ 22 and 24 is 2%. The premium for puts of strike price MXN/$ 22 and 24 is 2.5%. Hedge through the forward and options market.
Answer: 440 grams for 1.54 is the better value
Explanation:
Take the price and divide by the number of grams
1.54 / 440 =0.0035 per gram
1.26 / 340 =0.003705882 per gram
0.0035 per gram < 0.003705882 per gram
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