A B C D E F G H J 1 2 3 UNTS PAYABLE: YOU IMPORT TEXTILE PRODUCTS FROM TURKEY AND YOU AGREE THAT YOU WILL PAY TRY1,500,000 IN ONE MONTH FROM Payment Amount ############# EXCHANGE RATE INFORMATION Current Spot $ 1-month Forvard Rate $ 0.3300 Per TRY 0.3200 Per TRY Buy or Sell TRY Forvard? 4 5 6 7 8 9 10 11 12 13 14 15 16 17 17 18 MONEY MARKET INFORM US Turkey How to use Money Market Hedge (Borrow or Invest)? Borroving Rate (APR) 2.5% 10.0% How much to borrowlinvest in TRY? Investing (Lending) Rate 2.0% 9.0% How much to borrowlinvest today-in Dollars? How much is the future value of Investing/Borroving in a month? OPTION INFORMATION Which option to buy? Premium 100% of the spot rate, for one foreign e Premium Today Future Value of Premium Strike Price $ $ 0.34 Per TRY 19 20 21 22 23 24 25 26 27 28 29 30 31 TOTAL REVENUE FROM ACCOUNTS RECEIVABLE (1-month from now) Spot rate in 3 months (X 1 Strike Price Unhedged Forward Hede Option Hedge Money Market Hedge 0.23 123 0.24) 123 0.25 123 0.26 123 0.27 123 0.28 1.23 0.29 1.23 0.3 1.23 0.31 1.23 0.32 123 0.33 1.23 0.34 1.23 0.35 123 0.36 1.23 0.37 1.23 0.38 123 0.39 1.23 0.4 1.23 0.41 1.23 0.42 123 0.43 1.23 0.44 123 0.45 123 0.46 123 0.47 123 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46