Micca Metals, Inc. Micca Metals, Inc. is a specialty materials and metals company located in Detroit, Michigan. The company specializes in specific precious metals and materials that are used in a variety of pigment applications in many industries including cosmetics$,$ appliances, and a variety of high tinsel metal fabricating equipment. Micca just purchased a shipment of phosphates from Morocco for $6,900,000$ dirhams, payable in six months.

Six$-$month call options on $6,900,000$ dirhams at an exercise price of $10\mathrm{.}50$ dirhams per dollar are available from Bank Al$-$Maghrub at a premium of $1\mathrm{.}7\%.$ Six$-$month put options on $6,900,000$ dirhams at an exercise price of $10\mathrm{.}50$ dirhams per dollar are available at a premium of $3\mathrm{.}3\%.$ Using the exchange rate and interest rate data in the popup window, $,$ compare alternate ways below that Micca might hedge its foreign exchange transaction exposure.

a$.$ How much in U$.$S$.$ dollars will Micca pay in $6$ months without a hedge if the expected spot rate in $6$ months is assumed to be $10\mathrm{.}50$ dirhams per dollar? $10\mathrm{.}90$ dirhams per dollar?

b$.$ How much in U$.$S$.$ dollars will Micca Dav in $6$ months with a forward market hedae?

Data table

$($Click on the following icon in order to copy its contents into a spreadsheet.$)$

$\backslash$table$[[$Assumptions$,$Values$],[$Shipment of phosphates from Morocco, Moroccan dirhams,$6,900,000$