Problem:
Quasik Corporation will be paying 300,000 Canadian dollars (C$) in 90 days. Currently, a 90-day call option with an exercise price of $.75 and a premium of $.01 is available. Also, a 90-day put option with an exercise price of $.73 and a premium of $.01 is available. Quasik implements a currency option hedge.
Required:
Question: Assuming that the spot rate in 90 days is $.71, what is the total amount paid in US dollars?
Note: Provide support for your rationale.