Question: question1-3 Amazon buys a Mexico Peso put option (contract size: 500,000 Peso) at a premium of $0.0082/Peso. The exercise price is $0.054/Peso: 1.If the spot

question1-3

Amazon buys a Mexico Peso put option (contract size: 500,000 Peso) at a premium of $0.0082/Peso. The exercise price is $0.054/Peso:

1.If the spot at expiration is $0.062/Peso, what is the Amazon's profit?

2.If the spot at expiration is $0.050/Peso, what is the Amazon's profit?

3.If the spot at expiration is 0.042/Peso,, what is the Amazon's profit?

4.Explain what is financial management, operation management, and pricing management?

Give real life examples that MNCs use these strategies to manage their operating exposure.

5.For Avon's case in Lecture 9, what kind of management strategies (financial, operating, or pricing) did Avon use to manage its operating exposure?

6.Nissan produces a car that sells in Japan for 1.8 million. On September 1, the beginning of the model year, the exchange rate is 150:$1. Consequently, Nissan sets the U.S. sticker price at $12,000. By October 1, the exchange rate has dropped to 125:$1. Nissan is upset because it now receives only $12,000 x 125 = 1.5 million per sale. List seven strategies that are open to Nissan to improve its situation?

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