Corp. has futur one year. ket hedge Following information to make the decision. Verify your answer by determining the estimate (or probability distribution) of dollar revenue to be received in one year for each type of hedge. Spot rate of NZ$ One-year call option Money market hedge Total amount received is $ The money market hedge is -Select-to the option hedge. One-year put option One-year deposit rate. One-year borrowing rate Forecasted spot rate of NZ$ Do not round intermediate calculations. Round your answers to the nearest dollar. Option hedge $0.58 Exercise price = $0.51; premium $0.09 Exercise price = $0.54; premium $0.02 $0.51 $0.53 $0.56 U.S. 12% 15 RATE $0.51 0.53 0.56 NEW ZEALAND 7% $ $ 10 ROBABILITY 20% Possible Spot Rate Probability Total Amount Received 20% 50% 30% 50 30

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Exchange Rate Risk

It is the possibility that the value of a currency will fluctuate in the future. In the wake of globalization, business establishments have increasingly ventured into international markets. The volume of international trade has prospered excellently in the near past and is expected to be more affluent in the future. The use of exchange-traded derivative financial instruments has been multi-folded to provide for the requirements of various MNCs and offshore potential investors. Most banks and financial institutions have helped integrate the global economies. Our Government has introduced some bold and extreme measures to fulfil the purpose behind the fiscal, industrial, and monetary policies. The enactment of GST is a huge step towards streamlining the taxation system of the country. Owing to Covid-19, this aspect of corporate risk management has become critical.