VERY URGENT PLSS HELP Question 4 Pintaras Bh. expects to make a payment of Australian dollar (AUD) $400,000 in 120 days. The existing spot rate is $0.3041/RM. The 120-day forward rate of the Australian dollar is $0.3030/RM. Pintaras Bh. created a probability distribution for the future spot rate in 120 days as follows:

Future Spot Rate	Probability
S0.3045	0.15
$0.3033	0.80
$0.3020	0.05

Assume that 120-day put options on AUD are available, with an exercise price of $0.3027/RM and a premium of RM0.0089 per unit. 120-day call options on AUD are available with exercise price of $0.3028/RM and a premium of RM0.0119 per unit. Assume the following market rates:

	Malaysia	Australia
Deposit rate	4.6% p.a.	4.6% p.a.
Borrowing rate	6.5% p.a.	6.5% p.a.

Required: d. What would be the possible payments fi the company decide not to cover its exposure to foreign exchange rate risk? (4 Marks) e. Advice Pintaras B h on which strategy to use based on your findings from above (3 Marks) Subject: international finance