Assume that Kramer Co. will receive SF800,000 in 90 days. Today's spot rate of the Swiss franc is $0.62, and the 90-day forward rate is $0.635. Kramer has developed the following probability distribution for the spot rate in 90 days:

Possible Spot Rate in 90 Days Probability

$0.61 10%

$0.63 20%

$0.64 40%

$0.65 30%

The probability that the forward hedge will result in more dollars received than not hedging is:

a) 10%.

b) 20%.

c) 30%.

d) 50%.

e) 70%.

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