You source Ice Cubes to sell in the US from an Eskimo village and you owe them DKK 3,000,000 which is due in 60 days. Greenland is part of Denmark and uses Danish Krona (DKK) as its currency. If the Currency exchange rates and interest rates are a as follows what is your hedging decision? Data Table Amount (to be paid in DKK) DKK3,000,000 Days 60 Spot DKK5.7200/$ DKK is sold at Premium of 2% Forward premium or discount (calculate) Expected change in FX rate (calculate) Identify what kind of Option should be used DKK is sold at Premium of 1.50% Premium - CALL Option 1% Premium - PUT Option 2% CALL Strike Price DKK5.7500/$ PUT Strike Price DKK5.7500/$ Identify which rate should be used US borrowing AND investing 5% and 3% respectively 6% and 4% respectivelly Danish borrowing AND investing Cost of Capital (WACC) 10% Using data in the table above, you need to calculate proceeds of different hedging Question 6 1 pts Money market hedge (2) How much USD will you need to spend today to buy DKK for the investment (Hint: translate the DKK from previous question to USD). Question 7 1 pts Money hedge Adjust the amount in USD from the previous questions for the Time Value of Money (Hint: find the future value in 60 days of the amount from the previous question). Question 8 1 pts Option hedge (1) What option should you buy? O Call O Put You source Ice Cubes to sell in the US from an Eskimo village and you owe them DKK 3,000,000 which is due in 60 days. Greenland is part of Denmark and uses Danish Krona (DKK) as its currency. If the Currency exchange rates and interest rates are a as follows what is your hedging decision? Data Table Amount (to be paid in DKK) DKK3,000,000 Days 60 Spot DKK5.7200/$ DKK is sold at Premium of 2% Forward premium or discount (calculate) Expected change in FX rate (calculate) Identify what kind of Option should be used DKK is sold at Premium of 1.50% Premium - CALL Option 1% Premium - PUT Option 2% CALL Strike Price DKK5.7500/$ PUT Strike Price DKK5.7500/$ Identify which rate should be used US borrowing AND investing 5% and 3% respectively 6% and 4% respectivelly Danish borrowing AND investing Cost of Capital (WACC) 10% Using data in the table above, you need to calculate proceeds of different hedging Question 6 1 pts Money market hedge (2) How much USD will you need to spend today to buy DKK for the investment (Hint: translate the DKK from previous question to USD). Question 7 1 pts Money hedge Adjust the amount in USD from the previous questions for the Time Value of Money (Hint: find the future value in 60 days of the amount from the previous question). Question 8 1 pts Option hedge (1) What option should you buy? O Call O Put