please solve #23

4 pts Question 22 Suppose that a U.S.-based company exported goods to a Swiss firm and gave the Swiss client a choice of paying either $50,000 or SF 75,000 in three months. The spot exchange rate is $0.63/SF and the three-month forward rate is $0.65/SF. You are the CFO of the U.S. company. If you believe that the spot rate in three months is the same as the current forward rate, which currency do you think the Swiss client will choose to use for payment, and what is the expected value of this free option for the Swiss client? Swiss francs; 1.923 SF US dollars: 1,250 dollars US dollars: 2.750 dollars Swiss francs; 4,365 SF 4 pts Question 23 GED Corporation, located in the United States, has an accounts payable obligation of 800 million payable in one year to a bank in Tokyo. The current spot rate is 115/$1.00 and the one year forward rate is V110/$1.00. The annual interest rate is 3 percent in Japan and 6 percent in the United States. GED can also buy a one-year call option on yen at the strike price of $0.0080 per yen for a premium of 0.010 cent per yen. The future dollar cost of meeting this obligation using the money market hedge is $7,133833. 40 $6.5 $7.240,000. $7,159,139