B D E G H J ACOUNTS RECEIVABLE: YOU EXPORT TEXTILE PRODUCTS TO TURKEY AND YOU AGREE THAT YOU WILL GET TRY 1,500,000 IN ONE MONTH FROM NOW Payment Amount TRY 1,500,000.00 A 1 2 3 4 EXCHANGE RATE INFORMATION 6 Current Spot $ 0.3300 Per TRY 7 1-month Forward Rate $ 0.3200 Per TRY Buy or Sell TRY Forward? 8 9 MONEY MARKET INFORMA US Turkey 10 1-month Borrowing Rate ( 2.5% 11 1-month Investing (Lendin 2.0% 10.0% 9.0% How to use Money Market Hedge (Borrow or Invest)? How much to borrow linvest in TRY? 12 How much to borrow linvest today-in Dollars? How much is the future value of Investing/Borrowing in a month? 13 OPTION INFORMATION Which option to buy? 14 Premium 1.00% of the spot rate, for one foreign c Premium Today Future Value of Premium 15 Strike Price $ 0.34 Per TRY 16 17 18 Spot rate in 1 month (X Axi Strike Price TOTAL REVENUE FROM ACCOUNTS RECEIVABLE (1-month from now) Unhedged Forward Hedge Option Hedge Money Market Hedge 19 0.23 $ 0.32 20 0.24 $ 0.32 21 0.25 $ 0.32 22 0.26 $ 0.32 23 0.27 $ 0.32 24 0.28 $ 0.32 25 0.29 $ 0.32 26 0.3 $ 0.32 27 0.31 $ 0.32 28 0.32 $ 0.32 29 0.33 $ 0.32 30 0.34 $ 0.32 31 0.35 $ 0.32 32 0.36 $ 0.32 33 0.37 $ 0.32 34 0.38 $ 0.32 35 0.39 $ 0.32 36 0.4 $ 0.32 37 0.41 $ 0.32 38 0.42 $ 0.32 39 0.43 $ 0.32 40 0.44 $ 0.32 41 0.45 $ 0.32 42 0.46 $ 0.32 43 0.47 $ 0.32 44 45 46 47