hedging

$5$: A Japanese firm will be collecting the procedures for a car export to Thailand in $90$ days. Money will be

received in thai bats and treasurer of the japanese firm is afraid of forex risk, so she wants to hedge this

transaction. Calculate results of hedging with forward and Money Market, considering the following data:

$180$ day account receivable: $12$ million thai bats

Spot rate: $47\mathrm{.}15$ bats $\frac{?}{?}$$

Spot rate: $112\frac{}{\text{\$}}$

$180$ days Fwd: $45$ bats $\frac{?}{?}$$

$180$ days Fwd: $113/$$

Int rate in bats: $9\%$ per annum

int rate in yens: $2\%$ per annum

If $E=0\mathrm{.}45\frac{b}{?}$ yen and option prices are: $c=0\mathrm{.}03$ baht per yen and $p=0\mathrm{.}07$ baht per yen, calculate results hedging

with option chosen. At what future spot rate do you think this Japanese firm will be indifferent between option

and the best of Fwd and M$-$M hedging? Graph your results, explaining clearly all data obtained.