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pusiul $5 wilh an evercise prike of 50.74. SF for the premium of 50.05 per 5%. Aasume that your expected fiture spet exchange tare is

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pusiul \$5 wilh an evercise prike of 50.74. SF for the premium of 50.05 per 5%. Aasume that your expected fiture spet exchange tare is the same as the forward rate. The thee-moeth interest rate is 8 percent per annutn in the liaited States and 5 percent per annam in Switarerland n. Calculate yeur expected dollar coit of buging $F7.000 if you choose to hedge by a call option on SF, (Do not roand intermediate calculations. Reusd yeur anvwer to 2 decinal places. )(4 points) b. Calculate the future dollar cost of mecting this SF oblegation if you decide to hedge using a forwafd contract. ( 4 points) c. At what foture spot exchange rate will you be indafierent behween the forward and optica market hedges? (Do not round intermediate calculatiens. Pound your asswer to 5 decimal places.) (4 points)

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