Please use the following information to answer questions #13 - #19:

Account Payables: 5 million in one year

Interest in US: 6.10% per annum

Interest in UK: 9% per annum

Spot Exchange Rate: $1.50/

Forward Exchange Rate: $1.46/ (1-year maturity)

Call Option Strike Price: $1.46/

Put Option Premium: $0.02/

Questions:

13. How much will you receive in $ if you use the forward contract hedge? You must show all work to earn credit. No credit will be given without supporting work.

14. Draw a graph for the forward contract hedge. (X axis is the spot rate in the future. Y axis is $ cash paid.)

15. How much will you receive in $ if you use the money market hedge? You must show all work to earn credit. No credit will be given without supporting work.

16. Draw a graph for the money market hedge. (X axis is the spot rate in the future. Y axis is $ cash paid.)

17. How much will you receive in $ if you use the put option hedge? You must show all work to earn credit. No credit will be given without supporting work.

18. Draw a graph for the call option hedge. (X axis is the spot rate in the future. Y axis is $ cash paid.)

19. Find out point 1 and point 2. You must show all work to earn credit. No credit will be given without supporting work.