Yes you are right . To protect our current principle , we lock in at the current spot rate ( hoping of course to cash in on a better rate at expiry).
So insured UK # = 15M USD / Spot Rate in USDperUK#
Cost of insurance in USD = insured UK # * option price
Cost of Insurance in UK # = insured UK # * option price / spot rate
giving 9577 thousand as in the CFAI text |