. As treasurer of Killam Corp. (a U.S. exporter to New Zealand), you must decide how to hedge (if at all) future receivables of NZD 3,000,000 (NZD = New Zealand dollar) 90 days from now. Put options are available for a premium of USD .03 per unit and an exercise price of .42 NZDUSD. The forecasted NZDUSD spot rate in 90 days follows:

Future Spot Rate (NZDUSD) Probability

.44 40%

.40 50

.38 10

Given that you hedge your position with options, create probability distribution for USD to be received in 90 days. (15 points)