#30. If you use a put option on pounds to hedge this sale, what are expected dollar proceeds when the three-month forward rate, an unbiased predictor of the future spot exchange rate, is expected to be spot at contract maturity (what is the put option value at t=3 months)? a. $1,500,000.00 b. $1,561,860.00 c. $1,440,000.00 d. $1,438,140.00

The West Virginia coal coalition sold four cargo shipments to India to assist with energy requirements in rebuilding Nepal post the Spring 2015 earthquake. The first contract required a 2 million pound payment due in three months. Current spot exchange rate: 3-month forward exchange rate : 3-month put premium on UK pounds: 3-month put option on UK pounds: Current 3-month U.S. interest rate: Current 3-month U.K. interest rate: 1.2788 / $ 1.4670 / $ $ 0.03 / $ 0.75 / 3.1 % 4.2 % The West Virginia coal coalition sold four cargo shipments to India to assist with energy requirements in rebuilding Nepal post the Spring 2015 earthquake. The first contract required a 2 million pound payment due in three months. Current spot exchange rate: 3-month forward exchange rate : 3-month put premium on UK pounds: 3-month put option on UK pounds: Current 3-month U.S. interest rate: Current 3-month U.K. interest rate: 1.2788 / $ 1.4670 / $ $ 0.03 / $ 0.75 / 3.1 % 4.2 %