1. Assume that Intel has a contract to pay 675m Malaysian Ringgits (MYR) in 120 days. The current spot rate is $0.250 per MYR The 120 day future rate is $0.245 per MRY Annualized money market rates are 11.10% in Malaysia and 3.46% in the US A 120 day call with a strike of $0.220 is selling for $0.0275 A 120 day put with a strike of $0.258 is selling for $0.0185 a. If you wanted to hedge, explain how Intel could do that with the future, the call, and the put (would it buy or sell each and why)? b. If Intel wanted to do a money market hedge, explain how that would be constructed (where would Intel borrow money and where would it invest)? Suppose Intel expected the spot price in 120 days to be: i. $0.19 with 9% probability ii. $0.21 with 11% probability iii. $0.23 with 22% probability iv. $0.25 with 29% probability v. $0.27 with 17% probability vi. $0.29 with 12% probability c. If Intel remained unhedged, what is its expected revenue in dollars in 120 days? d. If Intel used a future hedge, what is its expected revenue in dollars in 120 days? e. If Intel used a call hedge, what is its expected revenue in dollars in 120 days? f. If Intel used a put hedge, what is its expected revenue in dollars in 120 days? If Intel used a money market hedge, what is its expected revenue in dollars in 120 days? g. If Intel is risk neutral, which approach should they take and why? h. If Intel is some degree of risk averse, are there any of the approaches that shouldnt even be considered (because they are completely dominated by another approach)?