Question: Please type the steps 2. Suppose that your company will be billed 10 million receivable in one year. The money market interest rates and foreign

Please type the steps 2. Suppose that your company will be

Please type the steps

2. Suppose that your company will be billed 10 million receivable in one year. The money market interest rates and foreign exchange rates are given as follows. How to hedge the risk for parable using forward contract. How to hedge the risk using money market? How to hedge risk using put option? put option exercise price $1.46/ with premium of $0.03 The U.S. one-year interest rate: 6.10% per annum The U.K. one-year interest rate: 9.00% per annum The spot exchange rate: $1.50/ The one-year forward exchange rate $1.46/ Answer: With forward contract: $14.6 million; Money market: $14.6million; Put option: $14.3million)

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