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K-Roo Ltd,'s US subsidiary has an outstanding AUD 641665 receivable that it is expecting to receive in 55 days, The bank provides the following alternatives

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K-Roo Ltd,'s US subsidiary has an outstanding AUD 641665 receivable that it is expecting to receive in 55 days, The bank provides the following alternatives to hedge K-Roo's exposure: A forward contract at a rate of USD1.0508/AUD, which can be tailored perfectly to K-Roo's outstanding receivable. A futures contract with a maturity in 60 days and a contract size of AUD62,500, currently priced at USD 1.0564/AUD. Because K-Roo cannot perfectly hedge its exposure using a futures contract, it uses the nearest whole number of contracts to its exposure (.e. it rounds the number of contracts up or down to nearest whole number). It closes out its futures position on the day of the receivable, The current spot rate is USD1.033/AUD. The spot and futures rates for the USD/AUD in 55 and 60 days are: Day Spot t = 55 USD1.0377/AUD USD1.0367/AUD t = 60 USD 1.0348/AUD USD 1.0343/AUD Futures What is the USD value of this receivable on the payment date if K-Roo were to hedge the exposure using a forward vs a futures contract? O a. The USD value of the receivable using the forward contract is USD665855.97, and USD674261.58 using the futures contract, O b. The USD value of the receivable using the forward contract is USD674261.58, and USD678168.27 using the futures contract. OC. The USD value of the receivable using the forward contract is USD677854.91, and USD665214,33 using the futures contract. O d. The USD value of the receivable using the forward contract is USD674261.58, and USD665865.97 using the futures contract. Oe. The USD value of the receivable using the forward contract is USD674261.58, and USD665214,30 using the futures contract

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