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Suppose that Goodwin Co, a U:5. based MNC, knows that it will recelve 300,000 pounds in one year. It is considering a forward put option

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Suppose that Goodwin Co, a U:5. based MNC, knows that it will recelve 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 51.20 and o premium of 30.03. 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: Goodwin would thike to analyze the possible doliar cash inflows from not hedging the receivables. Using this strategy case, the possible dollar cash inflows are shown in the following table: Given the information in the table, the expected value of dollar cash inflows when not hedging the recelvables, but simply exchanging pounds for dollars at the spot rate in one yeac, is for all 300,000 pounds

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