Question: Question 12 1 points Save Antwer Lear will make a payment of 100 M MXN (100 million Mexican pesos) on December 21, 2020 as part

Question 12 1 points Save Antwer "Lear will make a payment of 100 M MXN (100 million Mexican pesos) on December 21, 2020 as part of a significant capital investment in one of its facilities in Ciudad Jurez, Mexico. Lear s currency of operation is the USD, therefore. Lear is concerned about the volatility of the dollar peso exchange rate. You are helping construct a hedge today using futures on the Chicago Mercantile Exchange (CME) where a contract for 500,000 MXN trades. Assume today is in June 2020. Assume that the futures price today on the contract you selected above is Fo-0.0800 USD per 1 MXN. What are the sum total net-of-hedge cash flows for the optimal hedging strategy for the following spot rate scenarios on December 21, 2020?C." implies a cash outflow from Lear, implies a cash inflow to Lear.) Spot USD per MXN Not-of-Hedge Cash Flow USD 0.0900 8,000,000 0.0800 8,000,000 0.0700 8,000,000 O O Spot USD per MXN Net-of-Hedge Cash Flow USD 0.0900 5,000,000 0.0800 0 0.0700 -5,000,000 Spot USD per MXN Not-of-Hedge Cash Flow USD 0.0900 -9,000,000 M Question 12 1 points Save Antwer "Lear will make a payment of 100 M MXN (100 million Mexican pesos) on December 21, 2020 as part of a significant capital investment in one of its facilities in Ciudad Jurez, Mexico. Lear s currency of operation is the USD, therefore. Lear is concerned about the volatility of the dollar peso exchange rate. You are helping construct a hedge today using futures on the Chicago Mercantile Exchange (CME) where a contract for 500,000 MXN trades. Assume today is in June 2020. Assume that the futures price today on the contract you selected above is Fo-0.0800 USD per 1 MXN. What are the sum total net-of-hedge cash flows for the optimal hedging strategy for the following spot rate scenarios on December 21, 2020?C." implies a cash outflow from Lear, implies a cash inflow to Lear.) Spot USD per MXN Not-of-Hedge Cash Flow USD 0.0900 8,000,000 0.0800 8,000,000 0.0700 8,000,000 O O Spot USD per MXN Net-of-Hedge Cash Flow USD 0.0900 5,000,000 0.0800 0 0.0700 -5,000,000 Spot USD per MXN Not-of-Hedge Cash Flow USD 0.0900 -9,000,000 M

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