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Bobcat Company, U.S.-based manufacturer of industrial equipment, just purchased a Korean company. The purchase price was Won6,000 million. Won1,000 million has already been paid, and

Bobcat Company, U.S.-based manufacturer of industrial equipment, just purchased a Korean company. The purchase price was Won6,000 million. Won1,000 million has already been paid, and the remaining Won5,000 million is due in six months. The current spot rate is Won1,210/$, and the 6-month forward rate is Won1,325/$. The six-month Korean won interest rate is 16% pe annum, the six-month US dollar rate is 4% per annum. Bobcat can invest at these interest rates, or borrow at 2% per annum above those rates. A six-month call option on won with a 1300/$ strike rate has a 4.0% premium, while the six-month put option at the same strike rate has a 3.6% premium.

Whether the firm will use call option or put option and what is the premium?

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