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Please provide solutions to the following problems. Thanks! e) None of the above 4. An American firm is owed A$1,500,000.00 payable in one year. The

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Please provide solutions to the following problems. Thanks!

e) None of the above 4. An American firm is owed A$1,500,000.00 payable in one year. The current spot it $1.2000/A$. An Australian bank is paying 5.00% on deposits or will lend at 7.50%. A U.S. bank is paying 2.00% or will lend at 5.50%. The firm will hedge this exposure with money market hedging. How much will they get in one year? (a) $1,674,418.61 (b) $1,707,906.98 (c) $1,899,000.00 (d) $1,766,511.63 (e) None of the above 5. A firm has a receivable of C$1,000,000.00. They hegdge this exposure with a put option with a strike price of $1.3000/C$. The premium of the option is $0.0130. If at the time of payment the spot price ends up equal to $1.3260/C$, how much did the firm end up with? (a) $1,313,000 (b) $1,287,000 (c) $1,326,000 (d) $1,300,000 (e) None of the above

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