question 1-3

Walmartis considering the purchase ofBritish Poundcall options (contract size:62,500) with a strike price $1.31/. The premium is$0.025/.

1. Ifthe spot at expiration is $1.28/, what is the Walmart's profit?

2. If the spot atexpiration is $1.33/, what is theWalmart's profit?

3. Ifthe spot at expiration is $1.36/Peso, what is the Walmart's profit?

question 4-6

Amazon buys a Mexico Pesoputoption (contract size: 500,000 Peso) at a premium of $0.0082/Peso. The exercise price is $0.054/Peso:

4. If the spot at expiration is$0.062/Peso, what is theAmazon'sprofit?

5.If the spot at expiration is$0.050/Peso, what is theAmazon'sprofit?

6. If the spot at expiration is0.042/Peso,,what is theAmazon'sprofit?

7.Explain what is financial management,operation management, andpricing management?

Give real life examples that MNCs use these strategies to manage their operating exposure.

8.For Avon's casein Lecture 9,whatkind ofmanagementstrategies (financial, operating, or pricing) did Avon use to manage its operating exposure?

9.Nissan produces a car that sells in Japan for 1.8 million. On September 1, the beginning of the model year, the exchange rate is 150:$1. Consequently, Nissan sets the U.S. sticker price at $12,000. By October 1, the exchange rate has dropped to 125:$1. Nissan is upset because it now receives only $12,000 x 125 = 1.5 million per sale.List seven strategies thatare open to Nissan to improve its situation?