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U.S. dollarlJapanese Yen. What would be the premium expense, in home currency, for a Japanese firm to purchase an option to sPricing Currency Options on the Japanese Yen A Japanese firm wishing to buy A U.S.-based firm wishing to buy or sell dollars

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Answer #1

Buying an option to sell USD is a put option.

The premium for put option on the USD is JPY 3.0950 per dollar

Total premium for put option = 3.0950 * 700,000 USD = JPY 2,166,500

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