Assessment D: Chapter $8$ i

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$2$

$1$

points

$01$:$54$:$18$

a$.$ Calculate your expected dollar cost of buying SF$7,400$ if you choose to hedge by a call option on SF$.$

b$.$ Calculate the future dollar cost of meeting this SF obligation if you decide to hedge using a forward contract.

c$.$ At what future spot exchange rate will you be indifferent between the forward and option market hedges?

Complete this question by entering your answers in the tabs below.

Calculate your expected dollar cost of buying SF$7,400$ if you choose to hedge by a call option on SF$.$

Note: Do not round intermediate calculations. Round your answer to $2$ decimal places.

Total expected cost