4. It Stark uses the spot transaction (also known as a money market hedge) suggested in the case, how many Swiss Francs does Stark purchase in the spot market on February 15. 2818 and how many dollars does Stark borrow from the bank on February 15, 2018 to pay for the Swiss Francs that Stark purchases? . Note that the spot rate on May 18 is unknown at the time Stark makes its hedging decision on Feb 15, 2818. Stark's objective is to not have to trade in the spot market on May 16, 2018. There is no foreign exchange risk it it is unnecessary for Stark to buy or seii Swiss Francs on May 18 at the spot rate. (18 points) 5. It Stark uses the spot transaction suggested in the case, what is Stark's total dollar cost of the cowbell contract? What is Stark's prot on the cowbell purchase? - tnciude in total cost, the cost of the January deposit and the May payment. - You wiii need to caicuiate Stark's doiiar cash outow on May 18 {me ioan repayment). This is Stark's doiiar cost of the May 18 payment of SF 1,808,808. [18 points) 8. Marks has already ruled out hedging with the futures contract, because of the complexity of the hedge. A major concern for Marks is that Hunter Paul would not understand the cash ow with marking to market with a futures contract. Of the remaining two methods of hedging, forward hedge or spot transaction. which of the two would you recommend to Marks? - You shouid consider both risk and the total doiiar cost of each hedge