3. An American car parts manufacturer imports ignition sets from South Korea. The company signed a contract today to pay for the ignition sets in Korean Won upon delivery in four months: the price per set in Won was fixed in the contract. Since the price is per ignition set is fixed, is there any risk to be managed? If so, explain, and then also using both forward and option contracts, explain and show how the American Company manage this risk? 5pts. Illustrate each graphically 2pts. a.

3. An American car parts manufacturer imports ignition sets from South Korea. The company signed a contract today to pay for the ignition sets in Korean Won upon delivery in four months: the price per set in Won was fixed in the contract. a. Since the price is per ignition set is fixed, is there any risk to be managed? If so, explain, and then also using both forward and option contracts, explain and show how the American Company manage this risk? 5pts. Illustrate each graphically 2 pts