You plan to visit Geneva, Switzerland in three months to attend an international business conference. You expect to incur the total cost of SF 6,000 for lodging, meals and transportation during your stay. As of today, the spot exchange rate is $0.60/SF and the three-month forward rate is $0.62/SF. You can buy the three-month call option on SF with the exercise rate of $0.63/SF for the premium of $0.05 per SF. Assume that your expected future spot exchange rate is the same as the forward rate. The interest rate is 8 percent per year in the United States and 6 percent per year in Switzerland.

a) Cost of option premium at maturity date (considering time value of money): $_________________

b) if you choose to hedge via call option on SF and the realized spot rate is what you expect, your expected dollar cost of buying SF6000 is $_____________

c) If you decide to hedge using a forward contract, the future dollar cost of meeting this SF obligation is $________________

d) You will be indifferent between the forward and option market hedges if the future spot rate is $____________________per SF. (keep 3 decimal places.)