Save Answer Question 14 4 points Proctor and Gamble's affiliate in India, P & G India, procures much of its toiletries product line from a Japanese company. Because of the shortage of working capital in India, payment terms by Indian importers are typically 180 days or longer. P & G India wishes to hedge a 8.5 million Japanese yen payable. Although options are not available on the Indian rupee (RS), forward rates are available against the yen. Additionally, a common practice in India is for companies like P & G India to work with a currency agent who will, in this case, lock in the current spot exchange rate in exchange for a 4,85% fee. Using the following exchange rate and interest rate data, recommend a hedging strategy Assumptions Values 180-day account payable, Japanese yen (*) 8,500,000 120.00 48.00 Spot rate (W/S) Spot rate, rupees/dollar (Rs/5) 180-day forward rate (VR) 2.4000 2.6000 Expected spot rate in 180 days (WRU) 180-day Indian rupee investing rate 180 day Japanese yen investing rate Currency agent's exchange rate fee P& G India's cost of capital 1.500% 4.850% 12.00% Currency agent's exchange rate fee P&G India's cost of capital 4.850% 12.00% Please select a right answer and fill in. The implied cross rate of Yen/Rupee a. 2.3 b. 2.4 2.5 d. 2.6 e 2.7 f. 2.8 P and G India should a. buy a Yen forward b. sell a Yen forward c. borrow 8.5 million Yens now. . If there exists a market of currency market of Yen denominated in rupees, P and G India should hedge the yen risk by a. buy a yen call and buy a yen put b. buy a yen call and sell a yen put c. sell a yen call and buya yen put d. sell a yen call and sell a yen put. (Hint: Consider Please calculate the present value of cash flow if P&H India uses the agent and fixed exchange rate one half of the cost of capital as the discount rate and add the fixed fee 4.85%)