Ques $1$

Your company will pay $1$ million British pounds $($GBP$)$ in one year. You want to hedge the exchange rate risk. You collected the following data:

Spot exchange rate: $1\mathrm{.}4$ USD$/$GBP

Price of a put on the GBP with strike price $1\mathrm{.}4$ USD$/$GBP: $0\mathrm{.}03$ USD

Price of a call on the GBP with strike price $1\mathrm{.}4$ USD$/$GBP: $0\mathrm{.}04$ USD

Size of options contracts: $1$ GBP

U$.$S$.$ interest rate: $1$ percent APR

U$.$K$.$ interest rate: $0\mathrm{.}8$ percent APR

What is the future value in one year of the cost of the options necessary to hedge the exchange rate risk $($number of options x price x $(1+$ USD interest rate$))?$

Note: provide your answers with four decimal points and in millions of USD. Please do the calculations in Excel and round up the results to four decimal points only at the end, once the calculations are completed.

Ques $2$

Your company will pay $1$ million British pounds $($GBP$)$ in one year. You want to hedge the exchange rate risk. You collected the following data:

Spot exchange rate: $1\mathrm{.}4$ USD$/$GBP

Price of a put on the GBP with strike price $1\mathrm{.}4$ USD$/$GBP: $0\mathrm{.}03$ USD

Price of a call on the GBP with strike price $1\mathrm{.}4$ USD$/$GBP: $0\mathrm{.}04$ USD

Size of options contracts: $1$ GBP

U$.$S$.$ interest rate: $1$ percent APR

U$.$K$.$ interest rate: $0\mathrm{.}8$ percent APR

What is the maximum cost in USD $($net of the future value of the cost of the options$)$ that the company will pay in one year?

Note: provide your answers with four decimal points and in millions of USD. Please do the calculations in Excel and round up the results to four decimal points only at the end, once the calculations are completed.

Ques $3$

Your company will pay $1$ million British pounds $($GBP$)$ in one year. You want to hedge the exchange rate risk. You collected the following data:

Spot exchange rate: $1\mathrm{.}4$ USD$/$GBP

Price of a put on the GBP with strike price $1\mathrm{.}4$ USD$/$GBP: $0\mathrm{.}03$ USD

Price of a call on the GBP with strike price $1\mathrm{.}4$ USD$/$GBP: $0\mathrm{.}04$ USD

Size of options contracts: $1$ GBP

U$.$S$.$ interest rate: $1$ percent APR

U$.$K$.$ interest rate: $0\mathrm{.}8$ percent APR

You hedged fully the exposure with options. In one year the spot exchange rate is $1\mathrm{.}5$ USD$/$GBP$.$ What is the maximum total hedged cost, inclusive of the future value of the cost of the options?

Note: provide your answers with four decimal points and in millions of USD. Please do the calculations in Excel and round up the results to four decimal points only at the end, once the calculations are completed.

Ques $4$

Your company will pay $1$ million British pounds $($GBP$)$ in one year. You want to hedge the exchange rate risk. You collected the following data:

Spot exchange rate: $1\mathrm{.}4$ USD$/$GBP

Price of a put on the GBP with strike price $1\mathrm{.}4$ USD$/$GBP: $0\mathrm{.}03$ USD

Price of a call on the GBP with strike price $1\mathrm{.}4$ USD$/$GBP: $0\mathrm{.}04$ USD

Size of options contracts: $1$ GBP

U$.$S$.$ interest rate: $1$ percent APR

U$.$K$.$ interest rate: $0\mathrm{.}8$ percent APR

You hedged fully the exposure with options. In one year the spot exchange rate is $1\mathrm{.}3$ USD$/$GBP$.$ What is the maximum total hedged cost, inclusive of the future value of the cost of the options?

Note: provide your answers with four decimal points and in millions of USD. Please do the calculations in Excel and round up the results to four decimal points only at the end, once the calculations are completed.

Ques $5$

Your company will receive $1$ million euros in one year. You want to hedge the exchange rate risk. You collected the following data:

Spot exchange rate: $1\mathrm{.}3$ USD$/$EUR

Price of a put on the Euro with strike price $1\mathrm{.}3$ USD$/$EUR: $0\mathrm{.}06$ USD

Price of a call on the Euro with strike price $1\mathrm{.}3$ USD$/$EUR: $0\mathrm{.}05$ USD

Size of options contracts: $1$ EUR

U$.$S$.$ interest rate: $1$ percent APR

Euro interest rate: $2$ percent APR

What is the future value in one year of the cost of the options necessary to hedge the exchange rate risk $($number of options x price x $(1+$ USD interest rate$))?$

Note: provide your answers with four decimal points and in millions of USD. Please do the calculations in Excel and round up the results to four decimal points only at the end, once the calculations are completed.

Ques $6$

Your company will receive $1$ million euros in one year. You want to hedge the exchange rate risk. You collected the following data:

Spot exchange rate: $1\mathrm{.}3$ USD$/$EUR

Price of a put on the Euro with strike price $1\mathrm{.}3$ USD$/$EUR: $0\mathrm{.}06$ USD

Price of a call on the Euro with strike price $1\mathrm{.}3$ USD$/$EUR: $0\mathrm{.}05$ USD

Size of options contracts: $1$ EUR

U$.$S$.$ interest rate: $1$ percent APR

Euro interest rate: $2$ percent APR

What is the minimum revenue in USD $($net of the future value of the cost of the options$)$ that the company will receive in one year?

Note: provide your answers with four decimal points and in millions of USD. Please do the calculations in Excel and round up the results to four decimal points only at the end, once the calculations are completed.

Ques $7$

Your company will receive $1$ million euros in one year. You want to hedge the exchange rate risk. You collected the following data:

Spot exchange rate: $1\mathrm{.}3$ USD$/$EUR

Price of a put on the Eu