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UMD Company expects to receive 3,000,000 Swiss francs in one year. UMD created a probability distribution...

UMD Company expects to receive 3,000,000 Swiss francs in one year. UMD created a probability distribution for the future spot rate in one year which is below. Also below are the one year forward rate, options information, and interest rates.

Call Put
Spot SF1 = $1.00 Premium $0.03 $0.02
Forward SF1 = $0.92 Strike $0.92 $0.94
Future Spots Probability Rates U.S. Swiss
$0.89 20% Deposit 2% 3%
$0.93 50% Borrow 6% 8%
$0.97 30%


Given this information, determine the expected cash flows from an unhedged position, forward hedge, currency option hedge, and a money market hedge.

Round to the nearest whole number and no commas. Last question is a written answer.

What are the expected cash flows from:

An unhedged position? Answer

A forward hedge? Answer

An option hedge?   Answer

A money market hedge? Answer

Which hedge is optimal? Answer

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