Coleman Co. will pay 100,000 euros in a year and considers a money market hedging.

Please provide steps and analysis associated with your answers to the questions below.

1. If the forward rate is EURIUSD = 1.21 now= what is the cost of the forward hedging? 2. Assume non.r the annual U.S. interest rate is 71.5% and the annual euro interest rate is 4.5%. 1What is the cost ofthe moneyr market hedging? 3. Assume non.r the call option has an exercise price of EURJ'USD = 1.19 with a premium of $0.04. If the prediction of the spot rate in a year is as shown in the table below, what is the cost of the option hedging? 4. Wch hedging technique is optimal for Coleman Co. now? 5. Should Coleman Co. use the optimal hedging technique to hedge payables? The spot rate in a year Probability 1er 40% 1.23 60%