Spot Exchange Rate INR/USD	66.77 INR/$
60 Day Forward Exchange Rate INR/USD	63.70 INR/$
Interest Rates on deposits in India	6%/year
Call option exchange rate, 60 days	63.77 INR/$
Cost of options globally	1.25% of contract amount
Spot Exchange Rate USD/GBP	$1.22/
90 Day Forward Exchange Rate USD/GBP	$1.26/
Borrowing Rate in US	9%/year
Put option exchange rate, 90 days	$1.15/

Use the information in the above chart to answer all questions.

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Scenario 2

Tom Brady is purchasing 500 slightly deflated (American) footballs from Sports Direct, a sporting goods store located in the U.K. The total cost of the footballs are 10,000 and the U.K. retailer has agreed to offer 90 days credit terms.

1. Is the exchange rate provided above shown as a direct or indirect quote in terms of U.S dollars?

2. Suppose the sporting goods store, Sports Direct, agrees to complete the transaction using Tom Bradys currency (USD).

a. What amount would be shown on the invoice if the transaction were completed today?

b. Show how Sports Direct can use a forward market hedge to manage their transaction exposure. What is the invoiced amount now?

c. How can Sports Direct use a money market hedge to manage their transaction exposure?

d. Suppose the spot exchange rate in 90 days ends up being $1.25/. Show how Sports Direct can use an options market hedge to manage their transaction exposure. Make sure to explain why they would/would not exercise their option.

PLEASE SHOW WORK!