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Please use the following information for the next 2 questions. The nominal annual interest rate in Philippines is 15%. The nominal annual interest rate in
Please use the following information for the next 2 questions. The nominal annual interest rate in Philippines is 15%. The nominal annual interest rate in the U.S. is 8%. Evelyn expects that annual inflation will be about 13% in Philippines and 6% in the U.S. The spot rate of the Philippine peso is $0.017 per Philippine peso. Evelyn will receive 10 million Philippine pesos in one year. Question 16 (3.125 points) Determine the expected amount of dollars that Evelyn will receive if Evelyn uses an option hedge and believe in purchasing power parity (PPP). Both put options and call options on Philippine pesos are available with one year expiration date with an exercise price of $0.015/PHP and a premium of $0.002/PHP, where PHP represents Philippine peso. Question 16 options: $159,469.03$179,469.03$150,000.00$139,469.03 Question 17 (3.125 points) Determine the amount of dollars that Evelyn will receive if Evelyn uses a forward hedge and believes that the IRP presently exists. Question 17 options: $192,100.00. $162,267.15. $181,018.52. $159,652.17
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