Ministry of Health in Jordan has just signed a contract to purchase Corona Vaccine from UK for British Pound 3,000,000. The purchase was made in December 2020 with payment due six months later in June 2021. Ministry of Health is considering several hedging alternatives to reduce the exchange rate risk arising from the sale. To help the Ministry of Health make a hedging decision you have: -The spot exchange rate is JDL250/Pound - The six month forward rate is uD1.22/ Pound. - CVT's cost of capital is 11x - UK 8-month borrowing rate is 9% (or 4.5% for 6 months) - UK 6-month lending rate is 7x (or 3.5% for 6 months) - Jordan 6-month borrowing fate is 8% (or 4 for 6 months) - Jordan 6-month lending rate is 6% (or 3% for 6 monthis) - June call options for Pound 750,000; strike price J01.28, premuam price is 1.5\% - Ministry of Health forecast for 6-month spot rates is jDizifpound - The budget rate, or the highest acceptoble purchase price for this corona vaccine, is jb3,900,000 of jDi.30/Pound Ministry of Health in Jordan would be by an amount equal to With a foward nedge than it they had NOr hedged and their predicted exchange rate for 6 months had been correct. a worse off, jDist,000 b. worse off: JDikie000