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D Sinee randomness is involved, no hedging is possible. Use the information below to answer questior s 31-33 rincess Cruise Company (PCC) purchased a ship
D Sinee randomness is involved, no hedging is possible. Use the information below to answer questior s 31-33 rincess Cruise Company (PCC) purchased a ship from Mitsubishi Heavy Industry. PCC owes Mitsubishi Heavy Industry 500 million yen in ane year. The current spot rate is 124 yen per dollar and forward rate is 110 yen per dollar. The annual intere st rate is 5% in Japan and 8% in the US, PCC can a one-year call option on yen at the exercise price of $.0081 per yen for a premium of .014 cents per yen. 31. future dollar costs of meeting this obligation using the money market hedge? What are the $4,147,465. $4,000,455 $5,800, 50o A. B. D. $4,545,455 What are the future dollar costs of meeting this obligation using a forward market hedge? 54,147,465 32. B. $4,000,455 C. S5, 800,500 D. s4,545,455 53 the total expected future dollar cost of meeting this obligation when the option hedge is used? 575,600 S4,oso, 000 4. B. C $4, 125,60o D s4,545,455
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