Question: This question is multi tiered, but I ONLY need answer for #5. I have included the other parts of the question to provide needed information

This question is multi tiered, but I ONLY need answer for #5. I have included the other parts of the question to provide needed information and context, without violating the 1 question rule. Again, I ONLY need answer for #5. Please and thanks!

This question is multi tiered, but I ONLY need answer for #5.

I have included the other parts of the question to provide needed

I ONLY need answer for #5.

information and context, without violating the 1 question rule. Again, I ONLY

Question 1 1 pts Questions 1-8 are based on the following information: UA purchased an aircraft from Airbus and was billed 30 million payable in one year. UA is concerned with the USD costs from international sales and would like to control exchange risk. The current spot exchange rate is S1.05/ and one-year forward exchange rate is $1.10/ at the moment. UA can buy a one-year option on euro with a strike price of S1.12/ for a premium of $0.02 per euro. Currently, the annual interest rate is 5% in the euro zone and 600 in the U.S. This is an case for UA. A/P O A/R Question 2 1 pts If UA wants to hedge the transaction exposure using forward, UA should enter a position in a forward contract of 30 million due in one year. e long e short Question3 1 pts If UA enters a forward euro contract today, the guaranteed dollar cost for this euro obligation in one year should be $ (Please write your number in million $ and leave 3 decimal points if it is not a whole number. For example, if your answer is $50 million, write your answer as "S50" million. If your answer is $50.3 million, please write your answer as "$50.300" million.). million Question 4 1 pts If UA wants to hedge the transaction exposure using money hedge, UA should o borrow PV of euro and buy USD today, and deposit USD in the bank and sit on it. buy PV of euro today using USD, and deposit euro in the bank and sit on it. D Question 5 1 pts If UA uses MMH, the guaranteed dollar cost today should be S million (Please write your number in million S and leave 3 decimal points if it is not a whole number. For example, if your answer is $50 million, write your answer as "$50" million. If your answer is $50.3 million, please write your answer as "$50.300" million.)

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