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As treasurer of Tucson Corp. (a U.S. importer from Australia), you must decide how to hedge of at ali) future payables of 1,000,000 Australian dollars

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As treasurer of Tucson Corp. (a U.S. importer from Australia), you must decide how to hedge of at ali) future payables of 1,000,000 Australian dollars (AUD) 90 days from now. Call options are available for a premium of $.04 per unit and an exercise price of $.70 per Australian dollar. The forecasted spot rate of the AUD in 90 days follows: 1. Based on the above information. what is the tntal axpected yalue of using a call option hedging strategy? 2. What is the expected value of the not using a hedging strategy? 3. Assume the company is risk adverse. If applicable, what is the cost of hedging for this company

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