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Korean Airlines, Korean Airlines (KAL) has just signed a contract with Booing to purchase two new 747-400's for a total of $80,000,000, with payment in

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Korean Airlines, Korean Airlines (KAL) has just signed a contract with Booing to purchase two new 747-400's for a total of $80,000,000, with payment in two equal tranches. The first tranche of $40,000,000 has just been paid. The next $40,000,000 is due three months from today. KAL currently has excess cash of 33,000,000,000 won in a Seoul bank, and it is from these funds that KAL plans to make its next payment. The current spot rate is Won807/5, and permission has been obtained for a forward rate (90 days), Won802/$. The 90-day Eurodoilar interest rate is 5.500%, while the 90-day Korean won deposit rate (there is no Euro-won rato) is 4.500%. KAL can borrow in Korea at 6.625%, and can probably borrow in the U.S. dollar market at 10.000% A three-month call option on dollars in the over-the-counter market for a strike price of Won798/$ sells at a premium of 3.1%, payable at the time the option is purchased. A 90-day put option on dollars, also at a strike price of Won796/5, sells at a premium of 1.7%. KAL's foreign exchange advisory service forecasts the spot rate in three months to be Won798/5. Assume a 300-day financial year. Compare alternate ways below that KAL. might deal with its foreign exchange exposure. a. How much in Korean won will KAL pay in 90 days without a hedge if the spot rate in 90 days is the same as the expected spot rate of Won798/5? DO b. How much in Korean won will KAL pay in 90 days with a forward market hedgo? c. How much in Korean won will KAL pay in 90 days with a money market hedgo? d. How much in Korean won wil KAL pay in 90 days with an option hedge if the expected spot rate in 90 days is assumed to be greater than Won796/8? e. How should KAL plan to make the payment to Boeing if KAL's goal is to maximize the amount of won cash left in the bank at the end of the throw-month period? 3 nor a. How much in Korean won will KAL pay in 90 days without a hedge if the spot rate in so days is the same as the expected spot rate of Won798/$? Won 31920000000 (Round to the nearest whole number) mort. How much in Korean won wilKAL pay in 90 days with a forward market hedgo? Help Won 32000000000(Round to the nearest whole number) c. How much in Korean won will KAI. pay in 30 days with a money market hodgo? Won (Round to the nearest whole number) kom

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