Question: can you please solve it all thats how i can post it and please fast Vil Korean Airlines, Korean Airlines (KAL) has just signed a
Vil Korean Airlines, Korean Airlines (KAL) has just signed a contract with Boeing to purchase two new 747-400's for a total of $60,000,000 with payment in two equal tranches The first tranche of $30.000.000 has just been paid. The next $30,000,000 is due three months from today KAL currently has excess cash of 25,000,000,000 won in a Seoul bank and it is from these funds that KAL plans to make its next payment The current spot rate is Won800/s, and permission has been obtained for a forward rate (90 days), Won794/. The 90-day Eurodollar interest rate is 6000%, while the 90 day Korean won deposit rato (there is no Euro won rate) is 5.000% KAL can borrow in Korea at 6 250%, and can probably borrow in the US dollar market at 9.375% A three month call option on dollars in the over the counter market for a strike price of Won790/$ sells at a premium of 2.9%, payable at the time the option is s purchased A 90-day put option on dollars, also at a strike price of Won790$, solls at a premium of 19% KALS foreign exchange advisory service forecasts the spot rate in three months to be Won79275. Assume a 360 day financial year. Compare alternate ways below that KAL might deal with its fordign exchange exposure 3 a. How much in Korean won will KAL pay in 90 days without a hedge if the spot rate in 90 days is the same as the expected spot rate of Won 792/99 b. How much in Korean won will KAL pay in 90 days with a forward market hedgo? c. How much in Korean won will KAL pay in 90 days with a money market hedgo? d. How much in Korean won will KAL pay in 90 days with an option hedge if the expected spot rate in 90 days is assumed to be greater than Won790/5? .. How should KAI, plan to make the payment to Boeing I KAL's goal is to maximize the amount of won cash loft in the bank at the end of the three-month period? a. How much in Korean won will KAL pay in 10 days without a hedge if the spot rate in 90 days is the same as the expected spot rate of Won702
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