Application 
Air Products Loses Twice
In May 2000, Air Products & Chemicals Inc. announced a $300 million after-tax charge. The bulk of this charge came about from currency losses associated with the acquisition of British pounds to be used in a failed attempt to buy BOC Group PLC. After Air Products bought the pounds, the currency fell in value. According to the Wall Street Journal (May 11, 2000, p. A4), “While it would have had losses from the hedge even if it were to have acquired BOC, it would have effectively paid less as well, because of the currency’s decline.” Purchase of a call option on pounds sterling instead of its outright currency purchase would have protected Air Products from the currency losses on its failed acquisition.