Assume that your company has a receivable for $30$ million to be received in $90$

days. Given the market information in the table below, compute four different choices for the

currency exposure and recommend a hedging strategy.

Spot rate, USD$/$EUR $1\mathrm{.}415890-$day USD lending rate $4\mathrm{.}0\%$

$90-$day forward rate, USD$/$EUR $1\mathrm{.}419590-$day USD borrowing premium $+1\mathrm{.}0\%$

$90-$day forecast rate, USD$/$EUR $1\mathrm{.}420090-$day EUR lending rate $3\mathrm{.}885\%$

Cost of capital $($WACC$)9\mathrm{.}6\%90-$day EUR borrowing premium $+1\mathrm{.}115\%$

Call option with K$=1\mathrm{.}405\%$ Put option with K$=1\mathrm{.}402\%$

Call option with K$=1\mathrm{.}453\%$ Put option with K$=1\mathrm{.}454\%$