CAT Inc. a US-based manufacturer of heavy Industrial equipment just purchased components for its manufacturing process for 20,000,000 from a company in Japan. According to the terms of sale, CAT is allowed to make a payment in 90 days. The management of CAT Inc. would like to explore the option hedge Dataset (7) Current spot rate: W111.1200/$ 3-month forward rate: 109.9000/$ 90-day Investing rate in USA: 4% 90-day borrowing rate in USA: 5% 90-day investing rate in Japan: 1% 90-day borrowing rate in Japan: 3% CAT'S WACC: 11% Premium PUT option: 296 Premium CALL option: 1% CALL and PUT options strike price: 110.0054/$ Question 50 Use data from Dataset (7) What option should CAT Inc. buy to hedge its exposure? Put option Call option Question 51 Use data from Dataset (7) Calculate the cost of the option (the option premium) in USD today. Question 52 Use data from Dataset (7) Adjust the option's cost for the Time Value of Money (Hint: carry it forward). Question 53 1 pts Use data from Dataset (7) Find the total proceeds of the option hedge. In other words, find how much will CAT Inc. pay in USD in 90 days if the option is exercised. (Hint: account for the cost of the option) MacBook Air