Question: Graphically illustrate and explain how to hedge FX risk using options with a payoff diagram in the following scenarios. Assume that all options contracts are

Graphically illustrate and explain how to hedge FX risk using options with a payoff diagram in the following scenarios. Assume that all options contracts are denoted in USD per foreign currency unit.

a) BNY Mellon expects to receive interest payments in rand after funding a hydro- electric dam in South Africa.

b) Ethiopian Airlines contracts to purchase five 787s from Boeing next year.

c) ExxonMobil contracts to purchase an oil drilling lease in Tanzania this coming June.

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