unronos TimePieces.Chronos TimePieces of Boston exports watches to many countries,selling in local currencies to stores and distributors.Chronos prides itself on being financially conservative.At least 70%of each individual transaction exposure is hedged,mostly in theforward market,but occasionally with options.Chronos'toreignexchangepolicysuch that the 70%hedge may bi-Incitased up to a 120%hedge ifdevaluationor depreciation appearr imminent.Chronos has just shipped to its major North American distributor.It has issued a 90-dayinvoice to its buyer for1,670,000.The current spot rate is$1.2222/,the 90-day forward rate is$1.2279/.Chronos'treasurer,Manny Hernandez,has a very good track record in predicting exchange rate movements.He currently believes the euro Will weaken against the dollar in thecoming 90 to 120 days,possibly to around$1.1617/a.Evaluate the hedging alternatives for Chronos if Manny is right(Case 1:$1.1617/)and if Manny is wrong(Case 2:$1.2643/).What do you recommend

Najafi Company. Najafi Company, U.S.-based manufacturer of industrial equipment, just purchased a Korean company that produces plastic nuts and bolts for the remaining KRW7,200 million is due in six months. The current spot rate is KRW1,102= USD1.00, and the 6-month forward rate is KRW1,179 = USD1.00. The at these interest rates, or borrow at 2% per annum above those rates. A 6-month call option on won with a KRW1,200 = USD1.00 strike rate has a 4.4% premium 11.5%. Compare alternate ways below that Najafi might deal with its foreign exchange exposure. a. How much in U.S. dollars will Najafi pay in 6 months without a hedge if the expected spot rate in 6 months is assumed to be KRW1,102= USD1.00? KRW1,17 b. How much in U.S. dollars will Najafi pay in 6 months with a forward market hedge? c. How much in U.S. dollars will Najafi pay in 6 months with a money market hedge? d. How much in U.S. dollars will Najafi pay in 6 months with an option hedge if the expected spot rate in 6 months is assumed to be less than KRW1,200 = USD1 e. What do you recommend? Najafi Company. Najafi Company, U.S.-based manufacturer of industrial equipment, just purchased a Korean company that produces plastic nuts and bolts for the remaining KRW7,200 million is due in six months. The current spot rate is KRW1,102= USD1.00, and the 6-month forward rate is KRW1,179 = USD1.00. The at these interest rates, or borrow at 2% per annum above those rates. A 6-month call option on won with a KRW1,200 = USD1.00 strike rate has a 4.4% premium 11.5%. Compare alternate ways below that Najafi might deal with its foreign exchange exposure. a. How much in U.S. dollars will Najafi pay in 6 months without a hedge if the expected spot rate in 6 months is assumed to be KRW1,102= USD1.00? KRW1,17 b. How much in U.S. dollars will Najafi pay in 6 months with a forward market hedge? c. How much in U.S. dollars will Najafi pay in 6 months with a money market hedge? d. How much in U.S. dollars will Najafi pay in 6 months with an option hedge if the expected spot rate in 6 months is assumed to be less than KRW1,200 = USD1 e. What do you recommend