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Suncor is a Canadian company that exports to UK. The company will receive GBP 100,000...

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Finance

Suncor is a Canadian company that exports to UK. The company will receive GBP 100,000 in 90 days. It plans to use put options to hedge receivables of 100,000 pounds in 90 days. A put option is available that have an expiration date 90 days from now. Exercise Price is $1.80 with an option premium of 0.04. Suncor decides to purchase this option. If the market price is $1.86 on the settlement day, calculate the net inflow in dollars. Explain

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