Question: Suppose that Multen Co, a U.S.-based MNC, knows that it will need 300,000 pourds in one year in erder to purchase supplies. It is considerint
Suppose that Multen Co, a U.S.-based MNC, knows that it will need 300,000 pourds in one year in erder to purchase supplies. It is considerint a currency call option to hedpe this payable. Currency call options on the pound with expiration dates in one year currently have an exareise price of st.19 and a. premium of $0.05. Mullen Co, wistes to vise its own forecast of what the spot rate might be for the pound one year fram new. - \$1.14, with 20.00% probability 51.20, with 70.00% probability - 11,23 , with 10.009 probability For each scenanio in the following cable, fill in the dollar amount patid per unit for the call cotions (5th column). the total dollar amount paid for 300,000 pounds when using the call options (6th column), and whether Mullen would exercise the options (7th column)
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