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You will use the following information for the next six problems [7- 12]. ToybotsaUS company that exports robotic toys to Mexico The company expects to
You will use the following information for the next six problems [7- 12]. ToybotsaUS company that exports robotic toys to Mexico The company expects to receive 5,000,000 Mexican pesos (MXN) in one year from its exports. The firm expects the following exchange rate scenarios and probabilities: Spot rate Scenario Probability. 1n one year 0.5 $0.0538 $0.0545 $0.0552 A B 0.4 0.1 The spot rate is $0.0545 per peso and the one-year forward rate is $0.0556 per peso. The U.S. interest rate is 2% and the Mexican interest rate is 11%. A put option on pesos expiring in one year costs $0.0037 per peso and has an exercise price of $0.0545 per peso. What is the expected dollar cash flow in one year if the company does not hedge its receivables (in $)? O $271,100 $272,100 $271,500 $271,800
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