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You expect to incur the total cost of SF 8,000 for lodging, meals and transportation during your stay at Zurich. The trip will be in

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You expect to incur the total cost of SF 8,000 for lodging, meals and transportation during your stay at Zurich. The trip will be in 3 months. Assume that your expected future spot exchange rate is the same as the forward rate. Write concise and clear answers and address all aspects of the question. Spot exchange rate Forward exchange rate 3-month interest rate in US 3-month int 1SF - 50.60 I SF - 50.63 0.015 0.01 Information for listed Options Strike Price Put option premium $0.02 per SF SF 1 SF - 50.64 a. How to hedge the currency risk via option? Calculate your expected dollar cost of using option to hedge. Is this the maximum cost or minimum cost for you? b- How to use money market to hedge? Calculate your expected dollar cost of using money market to hedge. Write out steps not just numbers. How to hedge the currency risk via forward market? What is the future dollar cost of meeting this SF obligation using forward contract

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