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Kansas Corporation, an American company, has a payment of 15.2 million due to Tuscany Corporation one year from today. At the prevailing spot rate of

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Kansas Corporation, an American company, has a payment of 15.2 million due to Tuscany Corporation one year from today. At the prevailing spot rate of 0.90/$, this would cost Kansas \$5,777,778, but Kansas faces the risk that the /$ rote will fall in the coming year, so that it will end up paying a higher amount in dollar terms. To hedge this risk. Kansas has two possible strategies. Strategy 1 is to buy 65.2 million forward today at a one-year forward rate of 0.89 E/\$. Strategy 2 is to pay a premium of $102.000 for a one-year call option on 65,2 million at an exchange rate of 0.88C/$. a. Suppose that in one year the spot exchange rate is 0.85E/S. What would be Kansas's net dollar cost for the payable under each strategy? Note: Round your answer to the nearest whole dollar amount. b. Suppose that in one year the spot exchange rate is 0.951$. What would be Kansas's net dollar cost for the payable under each strategy? Note: Round your answer to the nearest whole dollar amount

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