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SUUT Not set answered Points out of 10.00 Flag question AU.S. MNC expects to receive 750 million from its customer one year from now. The

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SUUT Not set answered Points out of 10.00 Flag question AU.S. MNC expects to receive 750 million from its customer one year from now. The current spot rate is 116/$ and the one-year forward rate is 109/S. The annual interest rate is 3% on Wand 6% on USD. The put option on at the strike price of $0.008679 with 1 year expiration costs 0.012 cent/, while the call option on y at the strike price of $0.008/ with 1-year expiration costs 0.009 cenu. Paragraph Font size Font family E BI (1) Construct forward hedging for the MNC. Evaluate the result of forward hedging with calculations. (2) Implement money market hedging (MMH) for the MNC, Evaluate the result of forward hedging with calculations. (3) Implement option hedging for the MNC. Conduct cash flow analysis to show the result of option hedging. (4) At what future spot rate would the MNC be indifferent between forward hedging and MMH? Explain with calculation (5) At what future spot rate MMH is better than option hedging? (6) At what forward rate MMH is worse than forward hedging? (7) How to hedge the $750 million receivable if the payment by its customer is uncertain? eft 1:58:56 ELETT- PRARD

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