5Assume that Jones Co. will need to purchase 100,000 Singapore dollars (55) in 180 days. Today's spot rate of the 5S is 5.505, and the 180 day forward rate is $.52. Jones purchased the following forecast for the SS Possible Spot Rate in 180 Days Probability $.48 $.51 $.55 25% 60% a) What is the expected value of the 5$ payments in 180 days according to the forecast? 15% b) The probability that the forward hedge will result in a lower payment than leaving the position leaving the position un-hedged is: A) 15% B) 25% C) 75% D) 85% E) 0% b. Assume that Patton Co. will receive 100,000 New Zealand dollars (NZ$) in 180 days. Today's spot rate of the IS S.50. A call option on NZ$ exists, with an exercise price of $.52, a premium of $.02, and a 180-day expiration date. A put option on NZ$ exists with an exercise price of $.51, a premium of $.02, and a 180-day expiration date. Patton Co. has developed the following probability distribution for the spot rate in 180 days: Possible Spot Rate in 180 Days $.45 $.48 $.56 Probability 25% 55% 20% The probability that the option hedge will result in more U.S. dollars received than an unhedged position is (hint: remember to deduct the amount paid for the premium when estimating the U.S. dollars received on the options hedge). A) 0% B) 25% C) 80% D) 20% E) 75%