Najafi Group

Najafi Group, U.S.-based manufacturer of industrial equipment, just purchased a Korean company that produces plastic nuts and bolts for heavy equipment. The purchase price was 7,500 million Korean won (KRW). KRW1,000 million has already been paid, and the remaining KRW6,500 million is due in six months. The current spot rate is KRW1,110 = USD$1.00, and the 6-month forward rate is KRW1,175 = USD1.00. The 6-month Korean won interest rate is 16% per annum, the 6-month U.S. dollar rate is 4% per annum. Najafi can invest at these interest rates, or borrow at 2% per annum above those rates. A 6-month call option on won with a KRW1,200 = USD1.00 strike rate has a 3.0% premium, while the 6-month put option at the same strike rate h