Multinational Finance
Jalepeno Corp must sell Peso 10,000,000 on Dec 22, 2017. On september 25, 2017 Jalepeno corp baught a put option on on peso 10,000,000 with an exercise prices of peso 18.0/$ and the expiration date of January 20, 2018. The option permium is $0.001 per Mexican peso. There is brokerage commision of $12 for each contract of Peso 250,000.
The spot rate on the date when jalepeno must sell 10,000,000 turns out to be peso 20.0/$. On this date, the put option is selling for $0.005 per Mexican peso.
What is the actual dollar amount jalapeno receives from sale of peso 10,000,000?