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1. On January 1, Madison Co. ordered raw material from Japan and agreed to pay 100 million yen for this order on April 1. It negotiated a 3-month forward contract to obtain 100 million Japanese yen on that date at $.009. On February 1, the Japanese firm informed Madison Co. that it wouldn't be able to fulfill the order. The Japanese yen spot rate on February 1 is $.0087, and the 2-month forward rate exhibits a 2 percent discoun To offset its existing contract, Madison Co. will negotiate a forward contract to for the date of April 1, and the profit/loss generated from this transaction is a U.S. dollars. (Use four decimal points) sell yen; gain of $60,000 b. sell yen; loss of $50,000 c. buy yen; gain of $60,000 d. buy yen; loss of $50,000 a. 2. The spot exchange rate in 3 months is $1.25/. What is the net profit per unit? Long currency strangle Call option premium = $0.025/ Put option premium = $0.02/ Call option strike price = $1.30/ Put option strike price = $1.15/ Maturity = 3 months $0.055/ b. $0.00/ -$0.025/ d. -$0.045/ a. C. 3. With the strangle, find the break-even points. o Call option premium: $0.025/ o Put option premium: $0.02/ o Call option strike price: $1.15/ o Put option strike price=$1.05/ o Option contract size: 62,500 a. $1.005/ and $1.195/ b. $1.05/ and $1.15/ $1.03/ and $1.17/ C