KRW794 = USD1.00 sells at a premium of 3.1%, payable at the time the option is...

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KRW794 = USD1.00 sells at a premium of 3.1%, payable at the time the option is purchased. A 90-day put option on dollars, also at a strike price of KRW794 = USD1.00, sells at a premium of 1.5% (assuming a 12% volatility). KAL's foreign exchange advisory service forecasts the spot rate in three months to be KRW797 = USD1.00. Assume a 360-day financial year. Compare alternate ways below that KAL might deal with its foreign exchange exposure. 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 KRW797 = USD1.00? b. How much in Korean won will KAL pay in 90 days with a forward market hedge? c. How much in Korean won will KAL pay in 90 days with a money market hedge? 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 KRW794 = USD1.00? e. How should KAL plan to make the payment to Boeing if KAL's goal is to maximize the amount of won cash left in the bank at the end of the three-month period? KRW794 = USD1.00 sells at a premium of 3.1%, payable at the time the option is purchased. A 90-day put option on dollars, also at a strike price of KRW794 = USD1.00, sells at a premium of 1.5% (assuming a 12% volatility). KAL's foreign exchange advisory service forecasts the spot rate in three months to be KRW797 = USD1.00. Assume a 360-day financial year. Compare alternate ways below that KAL might deal with its foreign exchange exposure. 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 KRW797 = USD1.00? b. How much in Korean won will KAL pay in 90 days with a forward market hedge? c. How much in Korean won will KAL pay in 90 days with a money market hedge? 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 KRW794 = USD1.00? e. How should KAL plan to make the payment to Boeing if KAL's goal is to maximize the amount of won cash left in the bank at the end of the three-month period?