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A leading global producer of electrical power cords, electronic and optic cable assemblies. 15 manufacturing facilities with 19 sales and support offices As a Total Solution to its customers with
superior quality and wide variety of assembly and supply services.
Contents
Forward Contract Option Contract Scenario Analysis Option Pricing
Forward Contract
Forward contract is an obligation to buy or sell - a fixed amount of currency - at a future date - at a fixed rate
Loss
Prices decline
Spot price
Prices rise
Option Contract
Option Premium
This depends on the following factors: The price at which you want to buy/sell dollars (the favorable this price more will be the value of the option). The maturity longer the maturity more will be the option premium. The volatility in the market more fluctuations make an option costlier. The current market rate
Gains 0
Cost of premium Break Even at Rs50 Strike price at Rs49.9
Losses
Loss
Prices decline
Spot price
Prices rise
Break Even
Option Pricing
( In 000 INR for 1mio notional )
Thank You
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