Currency Options

Recently currency options are the new popular form of hedging. Use the Internet to locate a currency options calculator. Use the information in the chart below and calculate a currency option.

Detail	Amount
Domestic Currency	USD
Foreign Currency	EUR
Option Type	Call
Interest Rate	5%
Spot price	$1.57 cents
Spot Date	6/12/2012
Principle	200,000
Strike Price	Create this price
Expiration Date	7/12/2012
Volatility	2%

Research on the Internet and the Rasmussen research databases and write a 1 to 2 page paper that:

• Explains the option you calculated.
• Describes how hedging can be of advantage or disadvantage to the option.
• Use APA formatting for any citations and reference page.