4. You need to make a payment to your supplier in Australian dollars (A$). The current spot rate for the Australian dollar is $0.73/A$. Two call options with one month maturity on Australian dollars are available. The first option has an exercise price of $0.72/A$ and a premium of $0.03/A$. The second option has an exercise price of $0.76/AS and a premium of $0.01/AS. You are concerned that the Australian dollar may appreciate to $0.75 in one month and would like to use a bull spread to hedge your payable. a. Describe with the help of a diagram how you can use a bull spread to hedge your position. BA 43 44 43 104 [*] b. Assume the spot rate of the Australian dollar in one month is $0.75. Was the hedge effective? Why or why not