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A firm wants to use a CALL option to hedge CAD 10 million in payables...

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Finance

A firm wants to use a CALL option to hedge CAD 10 million in payables to Canadian firms. The premium is $.02. The exercise price is $1.10 per CAD. At the expiration date, the spot rate is $1.25. What is the total amount of dollars your company has to pay(after accounting for the premium paid)? (think about whether this company want to exercise its call option or not) In your answer, put 2 numbers after decimal place, Dont put $ or comma (,). simply enter, say, 1230456.

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