You are the treasurer of Montana Corp. and must decide how to hedge (if at all) future payables of 1 million Japanese yen 90 days from now. Call options are available with a premium of $0.0001 per unit and an exercise price of $0.01031 per Japanese yen. The forecasted spot rate of the Japanese yen in 90 days is:

Future spot rate	Probability
$0.01035	20%
$0.01032	20%
$0.01030	30%
$0.01029	30%

1. What is the probability that the call option will be exercised if Montana purchase it?

2. How much is the estimated cost of currency call option hedge (in $)?