Question

Currency Put Hedge on Receivables. As treasurer of Tucson Corp. (a U.S. exporter to New Zealand), you must decide how to hedge (if at all) future receivables of 250,000 New Zealand dollars 120 days from now. Put options are available for a premium of $.03 per unit and an exercise price of $.41 per New Zealand dollar. The forecasted spot rate of the NZ$ in 120 days follows: Future Spot Rate Probability $.43 30% $.40 50% $.38 20% What is the probability that the put option will be exercised if you purchased it? How much is the estimated profit of the currency put hedge?

          Currency Put Hedge on Receivables. 
As treasurer of Tucson Corp.
(a U.S. exporter to New Zealand), you must decide how to hedge (if
at all) future receivables of 250,000 New Zealand dollars 120 days
from now. Put options are available for a premium of $.03 per unit
and an exercise price of $.41 per New Zealand dollar. The
forecasted spot rate of the NZ$ in 120 days
follows: 
Future Spot Rate
Probability 
$.43 30% 
$.40 50% 
$.38 20% 
What is the probability that the put
option will be exercised if you purchased it? How much is the
estimated profit of the currency put hedge?

currency put hedge on receivables as treasurer of tucson corp a us exporter to new zealand you must decide how to hedge if at all future receivables of 250000 new zealand dollars 120 days fr 27654

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