4. A firm has a payable of SFr 4,200,000.00. They hegdge this exposure with a forward participation contract with a guaranteed rate of $1.2917/SFr and a participation rate of 35%. If at the time of payment the spot price ends up equal to $1.3046 SFr, how much will the firm have to pay? (a$5,444,103 (b) $5,425,140 (c) $5,479,320 (d) $5,406,177 (e) None of the above 5. A US company has land in Paris that will likely be sold in the next year. There are two possible states of the world. With a probability 65% the exchange rate will be $1.2083 . In this case the land will be worth 150,000. With a probability 35% the exhange rate will be $1.3050 and the land will be worth 156,000. How would you use financial hedging to hedge this exposure? (a) Sell 230,972 forward (b) Buy 150,000 forward (c) Sell 156,000 forward (d) Buy 226,352 forward (e) None of the above 4. A firm has a payable of SFr 4,200,000.00. They hegdge this exposure with a forward participation contract with a guaranteed rate of $1.2917/SFr and a participation rate of 35%. If at the time of payment the spot price ends up equal to $1.3046 SFr, how much will the firm have to pay? (a$5,444,103 (b) $5,425,140 (c) $5,479,320 (d) $5,406,177 (e) None of the above 5. A US company has land in Paris that will likely be sold in the next year. There are two possible states of the world. With a probability 65% the exchange rate will be $1.2083 . In this case the land will be worth 150,000. With a probability 35% the exhange rate will be $1.3050 and the land will be worth 156,000. How would you use financial hedging to hedge this exposure? (a) Sell 230,972 forward (b) Buy 150,000 forward (c) Sell 156,000 forward (d) Buy 226,352 forward (e) None of the above