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You are trying to decide how to hedge euro 3,000,000 accounts payable due in one year Current interest rates and exchange rates are Spot rate

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You are trying to decide how to hedge euro 3,000,000 accounts payable due in one year Current interest rates and exchange rates are Spot rate 1-year forward rate: 1-year interest rates $1.21/ euro $1.18/ euro interest rate: 2.20% per annum $ interest rate: 2.00% per annum Call option: $1.20 strike, premium S0.025/ Put option: $1.20 strike, premium S0.0125/ Note: Please answer the short questions in addition to completing the table a. If you are unhedged, what is your A/P payment in USD given different future spot rates? Complete the table below. In general, what is the accounts payable in dollars if unhedged. Future Spot Rate 1.10 1.15 1.20 1.25 1.30 A/P in USD You are trying to decide how to hedge euro 3,000,000 accounts payable due in one year Current interest rates and exchange rates are Spot rate 1-year forward rate: 1-year interest rates $1.21/ euro $1.18/ euro interest rate: 2.20% per annum $ interest rate: 2.00% per annum Call option: $1.20 strike, premium S0.025/ Put option: $1.20 strike, premium S0.0125/ Note: Please answer the short questions in addition to completing the table a. If you are unhedged, what is your A/P payment in USD given different future spot rates? Complete the table below. In general, what is the accounts payable in dollars if unhedged. Future Spot Rate 1.10 1.15 1.20 1.25 1.30 A/P in USD

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