Question 1 EGAS, the holding company for Egyptian Natural gas, is exporting LNG worth 500m Euros to Spain, sales proceeds will be received on 30th of June 2021. Spot rate of EUR/EGP is 18.70 / 18.80. The 3-month forward rate for EUR/EGP is 19.0/19.1.EGAS decides to hedge its exposure today via a forward contract. On the 30th of June 2021, the spot EUR/EGP is 19.2/19.25. What is the total amount that EGAS is going to receive in EGP?

Question 2 Dyo Delta Bioscience, is a giant pharmaceutical distributer in Europe. The company made a deal to import medicine worth 75 million USD from the US, to be delivered in November 2021. The current USD/EUR exchange rate is 0.85. Dyo Delta is worried that the exchange rate would go up hence they decided to hedge their position using call option with an exercise price of 0.88 and a premium of 0.01. After 9 months, the spot rate of USD/EUR is 0.92. Will Dyo Delta exercise the option? What is the total amount in EUR that Dyo Delta will pay?