Exercise 4.4: A Vietnamese company knows that it will pay 60 million JPY for importing goods from Japan in 3 months. Suppose there are JPY/VND futures contracts in Vietnam with the size of 30 million JPY per contract with the futures price F=291 (JPY/VND=291). Suppose there are also option contracts on JPY/VND with the exercise price K=300 (JPY/VND=300), the premium=0.154 per JPY. A. Which position in futures contract and in option contract should the company take if they would like to hedge the exchange rate risk? B. Which method of hedging (by futures contract or by option contract) is more favourable for the company if the spot rate in 3 months Sy=320? C. Answer question B in case S,=280 and S,=295