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Paragraph Styles DKNY owes 7 million Mexican pesos in 30 days for a recent shipment from Mexico. It faces the following interest and exchange rates:

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Paragraph Styles DKNY owes 7 million Mexican pesos in 30 days for a recent shipment from Mexico. It faces the following interest and exchange rates: Spot rate: Forward rate (30 days): 30-day call option on pesos: Premium: US. dollar 30-day interest rate (annualized): 7.5% 13.0 pesos/$ 13.1 pesos/$ strike price E-1/12.9-0.07752 S/peso 0.00077 S/peso 1 Peso 30-day interest rate (annualized): 15% (a). What dollar cost of the payable can DKNY lock in using the forward contract? (b) What is the hedged dollar cost of DKNY's payable using a money market hedge? (c). What is the hedged dollar cost of DKNY's payable using a call option? (d). Supposc that DKNY expechs the 30-day spot rate to be 13.4 pesos/S. Should it hedge this payable

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