STEP: 1 of 3 Suppose that Goodwin Co, a U.S. based MNC, knows that it will receive 300,000 pounds in one year. It is considering a forward put option to hedge this payable. Currency put options on the pound with expiration dates in one year currently have an exercise price of $1.20 and a premium of $0.03. Goodwin Co. wishes to use its own forecast of what the spot rate might be for the pound one year from now. The company believes there are three possible outcomes for the spot rate for the pound in one year. These three scenarios are shown in the following table: Pound Spot Rate in 1 Year 20.00% Option Premium Net Amount Received Per Unit, Less Premium Exercise Options? Scenario Probability $1.15 Dollar Amount Received from Hedging 300,000 Pounds $351,000 $357,000 $369,000 1 $0.03 $1.17 yes 2 $1.22 70.00% $0.03 $1.19 no 3 $1.26 10.00% 30.03 $1.23 no Given the information in the table, the expected value of dollar cash inflows when hedging these receivables with currency put options is for all 300,000 pounds. TOTAL SCORE: 0/3 Grade Step 1 (to complete this step and unlock the next step) STEP: 1 of 3 Suppose that Goodwin Co, a U.S. based MNC, knows that it will receive 300,000 pounds in one year. It is considering a forward put option to hedge this payable. Currency put options on the pound with expiration dates in one year currently have an exercise price of $1.20 and a premium of $0.03. Goodwin Co. wishes to use its own forecast of what the spot rate might be for the pound one year from now. The company believes there are three possible outcomes for the spot rate for the pound in one year. These three scenarios are shown in the following table: Pound Spot Rate in 1 Year 20.00% Option Premium Net Amount Received Per Unit, Less Premium Exercise Options? Scenario Probability $1.15 Dollar Amount Received from Hedging 300,000 Pounds $351,000 $357,000 $369,000 1 $0.03 $1.17 yes 2 $1.22 70.00% $0.03 $1.19 no 3 $1.26 10.00% 30.03 $1.23 no Given the information in the table, the expected value of dollar cash inflows when hedging these receivables with currency put options is for all 300,000 pounds. TOTAL SCORE: 0/3 Grade Step 1 (to complete this step and unlock the next step)