SMU Corp. has future receivables of 6 million New Zealand dollars (NZ$) in one year. It must decide whether to use options or a money market hedge to hedge this position. Use any of the following information to make the decision. Verify your answer by determining the estimate (or probability distribution) of dollar revenue to be received in one year for each type of hedge.

Spot rate of NZ$	$0.56
One-year call option	Exercise price = $0.50; premium = $0.07
One-year put option	Exercise price = $0.53; premium = $0.03

	U.S.		NEW ZEALAND
One-year deposit rate	11	%	6%
One-year borrowing rate	13		9

	RATE		ROBABILITY
Forecasted spot rate of NZ$	$0.50		20%
	0.52		50
	0.54		30

Do not round intermediate calculations. Round your answers to the nearest dollar.

Option hedge

Possible Spot Rate	Probability	Total Amount Received
$0.50	20%	$
$0.52	50%	$
$0.54	30%	$

Money market hedge

Total amount received is $?

The money market hedge is (superior OR inferior) to the option hedge.?