please help me answer the b for table 4?

thank you

Scenario 2: Considering the calculations you have done so far, you need to attend to a number of import and export transactions for goods that companies in the United States expressed interest in. The first transaction is for the import of good quality wines from Australia, since a retail liquor trading chain customer in the United States, for who you have been doing imports over the past five years has a very large order this time. The producer in Australia informed you that the current cost of the wine that you want to import is AUD$2,500,000. The producer in Australia will only ship goods in three months' time due to seasonal differences but payment will have to be conducted six months from now. The second transaction is for the export of 3d printers manufactured in the U.S.A. The country where it will be exported to is Canada. The payment of CAD 2,500,000 for the export to Canada will be received nine months from now. You consider different transaction hedges, namely forwards, options and money market hedges. You are provided with the following quotes from your bank, which is an international bank with branches in all the countries: Forward rates: Currencies Spot S/CAD 9 month (27012 month (360 3 month (90 6 month (180 days) days days) days 0.76843 0.76748 0.72766 0.77475 0.76559 0.72516 0.76465 0.72892 0.72641 S/AUD 0.72390 Bank applies 360 day-count convention to all currencies (for this assignment apply 360 days in all calrulationc) .76559 0.76465 0 u.//475 0.72641 0.76748 0.72766 /AUD Bank applies 360 day-count convention to all currencies (for this assignment apply 360 days in all 0.72390 0.72516 0.72892 calculations) Annual borrowing and investment rates foryour company: Country 3 month rates 6 months rates 9 month rates12 month rates United states | 2.687% Borrow Invest Borrow InvestBorrow Invest BorrowInvest | 2.554%| 2.713%| 2.580%| 2.740%| 2.607%| 2.766%| 2.633% Canada | 2.177%| 2.069%| 2.198%| 2.090%| 2.220%| 2.112%| 2.241%| 2.133% 1.992%| 1.894%| 2.012%| 1.914%| 2.031%! 1.933% 1.875%! 1.973%| Australia l Bank applies 360 day-count convention to all currencies. Explanation-e.g.3 month borrowing rate on $-2.68 interest rate is actually 2.687%)4 0.67175% Furth are not borrowing and investment rates from a bank perspective 3 months the This is the annual borrowing rate for3 months.If you only borrow fora 7%. This is the annual borrowing rate for 3 months. If you only borrow (always round to 5 decimals when you do calculations) ermore, note that these are the rates at which your company borrows and invests. The rates Option prices: Currencies 3 month options 6 month options Call option Call option Put option Put option Premium Strike Premium Strike Premium Strike Premium in $ in in in S0 76292 S0.00392 So 76828 $0 00392 s0 77205 $0 00387$0.7747 000387 $0.72155 50.00690 S0.72843 s0.00690 s0.72279S0.00688 S0.72969 0.00588 S/CAD S/AUDs Bank applies 360 day-count convention to all currencies. (Students also have to apply 360 days in all calculations). Option premium calculations should include time value calculations based on US $ annual borrowing interest rates for applicable time periods e.g. 3 month $ option premium is subject o 2.687%/4 interest rate.) a. Calculate the cost of money market hedges forthe imports from Australia (Complete Table 3 on the separate answer sheet) b. Determine the option types that you will consider based on the exchange rate quotes provided by your bank. Remember we willong or short the base currencies (in this case study the currencies that are not $) and the FV of premium cost is based on the borrowing cost of $ for the time period of the option. For example if it is a 3 month option, then the interest rate that should be applied is U nite d State s 3 month borrowing rate of 2.687%/4-0.67175%). Calculate the total cost of using options as hedging instrument forthe import fromAustralia (Complete Table 4 on the separate answersheet) c. Compare the forward quotes, money market hedges and options with each otherto determin nr ductralia(Complete Table 5 on the separate answer sheet) b. Determine the option typ your bank. Rememberwe willlong or short the base currencies (in this case studythe currencies that are not $) and the FV of premium cost is based on the borrowing cost of S for the time period of the option. For example if it is a 3 month option, then the interest rate that should be applied is United States 3 month borrowing rate of 2.687%/4 0.67175%). Calculate the total cost of using options as hedging instrument for the import from Australia (Complete Table 4 on the separate answer sheet) es that youwill consider based on the exchange rate quotes provided by c. Compare the forward quotes, money market hedges and options with each otherto determine the best exchange rate hedges for Australia (Complete Table 5 on the separate answersheet) d. Calculate the exchange rates that will apply if the money market hedges are used forthe exports to Canada (Complete Table 6 on the separate answersheet) e. Compare the forward quotes and money market hedges with each other to determine the best exchange rate hedges for Canada (Complete Table 7 on the separate answersheet) f. Assume youentered into the forward hedge for the import from Australia. Four months have passed since you entered into the hedge. Interest rates are the same as before. The spotexchange rate of the $/AUD is 0.72551. Calculate the value of yourforward position. Please use a 360 day count convention, since the bank also used a 360 day-count convention with the forward quotes provided to you. Also remember for interest rates use risk free rates provided underscenario 1 Show your calculation in table 8 on the separate answersheet. END OF QUESTIONS Table 4: Australia import cost with option hedge: (8 marks) Type of option (CalTotal premiumin or put?) To cost for import p Show answers in this row Show your workings in the columns below the answers $ premium x total AUD value of import x (1+i) Table 4: Australia import cost with option hedge: (8 marks) Total cost of option Option hedge nium in $ (Strike plusbreakeven port premium) exchange rate (Strike price x total n x total of 1ti AUD value of Total cost of option in $/Total AUD premium value of transaction import) + total Scenario 2: Considering the calculations you have done so far, you need to attend to a number of import and export transactions for goods that companies in the United States expressed interest in. The first transaction is for the import of good quality wines from Australia, since a retail liquor trading chain customer in the United States, for who you have been doing imports over the past five years has a very large order this time. The producer in Australia informed you that the current cost of the wine that you want to import is AUD$2,500,000. The producer in Australia will only ship goods in three months' time due to seasonal differences but payment will have to be conducted six months from now. The second transaction is for the export of 3d printers manufactured in the U.S.A. The country where it will be exported to is Canada. The payment of CAD 2,500,000 for the export to Canada will be received nine months from now. You consider different transaction hedges, namely forwards, options and money market hedges. You are provided with the following quotes from your bank, which is an international bank with branches in all the countries: Forward rates: Currencies Spot S/CAD 9 month (27012 month (360 3 month (90 6 month (180 days) days days) days 0.76843 0.76748 0.72766 0.77475 0.76559 0.72516 0.76465 0.72892 0.72641 S/AUD 0.72390 Bank applies 360 day-count convention to all currencies (for this assignment apply 360 days in all calrulationc) .76559 0.76465 0 u.//475 0.72641 0.76748 0.72766 /AUD Bank applies 360 day-count convention to all currencies (for this assignment apply 360 days in all 0.72390 0.72516 0.72892 calculations) Annual borrowing and investment rates foryour company: Country 3 month rates 6 months rates 9 month rates12 month rates United states | 2.687% Borrow Invest Borrow InvestBorrow Invest BorrowInvest | 2.554%| 2.713%| 2.580%| 2.740%| 2.607%| 2.766%| 2.633% Canada | 2.177%| 2.069%| 2.198%| 2.090%| 2.220%| 2.112%| 2.241%| 2.133% 1.992%| 1.894%| 2.012%| 1.914%| 2.031%! 1.933% 1.875%! 1.973%| Australia l Bank applies 360 day-count convention to all currencies. Explanation-e.g.3 month borrowing rate on $-2.68 interest rate is actually 2.687%)4 0.67175% Furth are not borrowing and investment rates from a bank perspective 3 months the This is the annual borrowing rate for3 months.If you only borrow fora 7%. This is the annual borrowing rate for 3 months. If you only borrow (always round to 5 decimals when you do calculations) ermore, note that these are the rates at which your company borrows and invests. The rates Option prices: Currencies 3 month options 6 month options Call option Call option Put option Put option Premium Strike Premium Strike Premium Strike Premium in $ in in in S0 76292 S0.00392 So 76828 $0 00392 s0 77205 $0 00387$0.7747 000387 $0.72155 50.00690 S0.72843 s0.00690 s0.72279S0.00688 S0.72969 0.00588 S/CAD S/AUDs Bank applies 360 day-count convention to all currencies. (Students also have to apply 360 days in all calculations). Option premium calculations should include time value calculations based on US $ annual borrowing interest rates for applicable time periods e.g. 3 month $ option premium is subject o 2.687%/4 interest rate.) a. Calculate the cost of money market hedges forthe imports from Australia (Complete Table 3 on the separate answer sheet) b. Determine the option types that you will consider based on the exchange rate quotes provided by your bank. Remember we willong or short the base currencies (in this case study the currencies that are not $) and the FV of premium cost is based on the borrowing cost of $ for the time period of the option. For example if it is a 3 month option, then the interest rate that should be applied is U nite d State s 3 month borrowing rate of 2.687%/4-0.67175%). Calculate the total cost of using options as hedging instrument forthe import fromAustralia (Complete Table 4 on the separate answersheet) c. Compare the forward quotes, money market hedges and options with each otherto determin nr ductralia(Complete Table 5 on the separate answer sheet) b. Determine the option typ your bank. Rememberwe willlong or short the base currencies (in this case studythe currencies that are not $) and the FV of premium cost is based on the borrowing cost of S for the time period of the option. For example if it is a 3 month option, then the interest rate that should be applied is United States 3 month borrowing rate of 2.687%/4 0.67175%). Calculate the total cost of using options as hedging instrument for the import from Australia (Complete Table 4 on the separate answer sheet) es that youwill consider based on the exchange rate quotes provided by c. Compare the forward quotes, money market hedges and options with each otherto determine the best exchange rate hedges for Australia (Complete Table 5 on the separate answersheet) d. Calculate the exchange rates that will apply if the money market hedges are used forthe exports to Canada (Complete Table 6 on the separate answersheet) e. Compare the forward quotes and money market hedges with each other to determine the best exchange rate hedges for Canada (Complete Table 7 on the separate answersheet) f. Assume youentered into the forward hedge for the import from Australia. Four months have passed since you entered into the hedge. Interest rates are the same as before. The spotexchange rate of the $/AUD is 0.72551. Calculate the value of yourforward position. Please use a 360 day count convention, since the bank also used a 360 day-count convention with the forward quotes provided to you. Also remember for interest rates use risk free rates provided underscenario 1 Show your calculation in table 8 on the separate answersheet. END OF QUESTIONS Table 4: Australia import cost with option hedge: (8 marks) Type of option (CalTotal premiumin or put?) To cost for import p Show answers in this row Show your workings in the columns below the answers $ premium x total AUD value of import x (1+i) Table 4: Australia import cost with option hedge: (8 marks) Total cost of option Option hedge nium in $ (Strike plusbreakeven port premium) exchange rate (Strike price x total n x total of 1ti AUD value of Total cost of option in $/Total AUD premium value of transaction import) + total