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Toybot is a U.S. company that exports robotic toys to Mexico. The company expects to receive 5 000.000 Mexican pesos (MXN) in one year from
Toybot is a U.S. company that exports robotic toys to Mexico. The company expects to receive 5 000.000 Mexican pesos (MXN) in one year from its exports. The firm expects the following exchange rate scenarios and probabilities: Scenario Spot rate Probability 1n one year $0.0538 6.5 $0.0545 $0.0552 0.4 0.1 The spot rate is $0.0545 per peso and the one-year forward rate is $0.0556 per peso. The U.S. interest rate is 2% and the Mexican interest rate is 11%. A put option on pesos expiring in one year costs $0.0037 per peso and has an exercise price of $0.0545 per peso. What will be the cash inflow if the firm uses a forward contract (in $)? $272,500 O $269,000 $278,000 $284,000
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