You have a 1 million payable due in 3 months Show on a chart a) The dollar cost of the unhedged payable as a function of the spot exchange rate 3 months from now b) The profit (loss) from a 3 month 1 million call option with a strike price of $1 75 and a premium of $0 40 c)Yourtotalcashflow3monthsf...

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You have a 1 million payable due in 3 months. Show on a chart a) The dollar

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You have a 1 million payable due in 3 months. Show on a chart

a) The dollar cost of the unhedged payable as a function of the spot exchange rate 3 months from now
b) The profit (loss) from a 3-month 1 million call option with a strike price of $1.75/ and a premium of $0.40/.
c)Yourtotalcashflow3monthsfromnow
d) What would be your total cash flow if you hedged with a forward contract. Assume that the forward price is also $1.75/

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