Q3. TexMesq (21 points) TexMesq sells mesquite woods to a Swiss buyer. A receipt of CHF 1 million is due in 6 months. Here are the relevant quotes: Spot exchange rate: 0.80 $/CHF Dollar interest rate: 0.025 (=2.50%), annualized, simple interest Franc interest rate: 0.01 (=1.00%), annualized, simple interest Option premiums ($/CHF): Strike ($/CHF) 0.75 0.85 Call 0.06 (c6.0) 0.024 (2.4) Put 0.02 (2.0) 0.051 (5.1) a) Use a relevant parity condition to compute the 6-month forward rate. $/CHF b) Suppose TeXMesq hedges the exposure by a forward contract with the forward rate calculated in Part a). How many francs (in millions) should it buy or sell forward? Amount: "Buy" or "Sell": million francs forward in 6 months