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Frisco Corp. expects to pay 550,000 in 180 days The spot rate of pound as of today = $1.80 The 180-day forward rate of pound

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Frisco Corp. expects to pay 550,000 in 180 days The spot rate of pound as of today = $1.80 The 180-day forward rate of pound as of today = $1.79 A 180-day call option exists with strike price $1.81 and premium $0.015 Interest rates are as follows: Possible U.K. U.S. Probability Spot Strike (Y/N) 180-day deposit rate 4.51% 4.52% $1.43 22% 180-day borrowing 5.20% 5.10% 1.46 68% rate 1.52 10% Choose the best of the following four strategies based on the expected payment critireon. Four Strategies to be considered: Expected $ Payment 1 Forward Hedge 2 Money Market Hedge Fill these in: 3 Put Option Hedge 4 No Hedge

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