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5 A U.S. firm has sold an Italian firm 1,000,000 worth of product. In one...

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5 A U.S. firm has sold an Italian firm 1,000,000 worth of product. In one year the U.S. firm gets paid. To hedge, the U.S. firm bought put options on the euro with a strike price of $1.65. They paid an option premium $0.01 per euro. Assume the one-year dollar interest rate is 6.1% and at maturity, the exchange rate is $1.60, 8 01:38:14 Multiple Choice the firm will realize $1,145,000 on the sale net of the cost of hedging. the firm will realize $1,150,000 on the sale net of the cost of hedging. the firm will realize $1,640,000 on the sale net of the cost of hedging. none of the options

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