1. You should treat February 15, 2018 as the date when you are performing your analysis and acting on the analysis (hedging or not hedging).
2. Stark purchased SF 100,000 in the spot market on January 18, 2018 to make the deposit payment required by a cowbell purchase contract.
3. If First Mississippi Bank is lending dollars to Stark Supply Co., Stark is borrowing from First Mississippi Bank and must repay the loan in 90 days. The amount borrowed is a present value and the amount repaid is a future value. The future value represents Starks dollar cost of the SF 1,000,000 payment.

Consider possible spot rates for the Swiss Franc on May 16 below. You should consider spot rates at regular intervals. Recall that in February, you do not know the spot rate for the Swiss Franc on May 16. Rather than consider one possible future spot rate, you should consider many. Here the objective is hedging, but you can still do the same type of analysis in an excel spreadsheet or with a graph. You need to consider pairs of future spot rates and Total Dollar Cost given hedging with an option. Given an option hedge, calculate the Total Dollar Cost of the cowbell purchase corresponding to each possible future spot rate for the Swiss Franc.

On February 15, 2018:
Ask Quotes for Swiss Franc currency options: May 16, 2018 maturity
Option Strike Price			Call option premium			Put option premium
	$ 1.050			$0.0941			$0.0559
	$ 1.075			$0.0812			$0.0678
	$ 1.100			$0.0695			$0.0810

Historic Data: Exchange Rate for the Swiss Franc
Date	Dollars/SF
2/15/2018	$ 1.083038