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Suppose that Goodwin Co., a U.S. based MNC, knows that it will receive 100,000 pounds in one year. It is considering a currency put option

image text in transcribed Suppose that Goodwin Co., a U.S. based MNC, knows that it will receive 100,000 pounds in one year. It is considering a currency put option to hedge this receivable. 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. On the following graph, use the blue points (circle symbols) to plot the contingency graph for hedging this receivable with a put option. Plot the points from left to right in the order you would like them to appear. Line segments will connect automatically. Plot the 3 blue points for the following pound spot rates: $1.17,$1.20,$1.24. Note: The vertical axis measures dollar cash inflows from the hedge, which includes the price received for pounds and any option premium

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