CAT Inc. a US-based manufacturer of heavy industrients purchased components for its actus 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: 111.1200/$ 3-month forward rate: V 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: 1196 Premium PUT option: 2% Premium CALL option: 1% CALL and PUT options strike price: 110.0054/5 Question 50 1 pt Use data from Dataset (7) What option should CAT Inc. buy to hedge its exposure? Call option Put option Use data from Dataset (7) Calculate the cost of the option the option premium in USD today Question 52 1 pts Use data from Dataset (7) Adjust the option's cost for the Time Value of Money (Hint: carry it forward). U 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 options exercised. (Hint: account for the cost of the option)