On October 1st 2010, a US pharmaceutical company exporting to the UK knows that has an account receivable of 2500,000 due on Friday, March 19 th 2011 . The following data is available: - Spot rate (US cents per British pound): 158.34 - 170-day forward day (US cents per British pound): 158.05 - US dollar 170-day interest rate: 0.20% p.a. - British pound 170-day interest rate: 0.40% p.a. - Option data for March contracts in c/E : This company would like to understand the different options to hedge this tranuaction using forward and options. a) What transaction will this company do to hedge using forwands? What will be the revenue that it will obtain in March? b) If this company uses options, what transaction will it do if it choones a strile price of 158 cents per pound? 2. c) What would be the upifront cust that this comagiy pees fic the eptise is Ortoben 2010? d) Under which coudition, the conpang will exrocie 1he uptive? What woul to the it will recesive the cquton and the Fanwer? On October 1st 2010, a US pharmaceutical company exporting to the UK knows that has an account receivable of 2500,000 due on Friday, March 19 th 2011 . The following data is available: - Spot rate (US cents per British pound): 158.34 - 170-day forward day (US cents per British pound): 158.05 - US dollar 170-day interest rate: 0.20% p.a. - British pound 170-day interest rate: 0.40% p.a. - Option data for March contracts in c/E : This company would like to understand the different options to hedge this tranuaction using forward and options. a) What transaction will this company do to hedge using forwands? What will be the revenue that it will obtain in March? b) If this company uses options, what transaction will it do if it choones a strile price of 158 cents per pound? 2. c) What would be the upifront cust that this comagiy pees fic the eptise is Ortoben 2010? d) Under which coudition, the conpang will exrocie 1he uptive? What woul to the it will recesive the cquton and the Fanwer