problem: As treasurer of Tucson Corp. [A United State exporter to New Zealand], you must decide how to hedge [if at all] future receivables of 250,000 New Zealand 90 dollars days from now. Put options are available for a premium of dollars.03 per unit and an exercise price of dollars .49 per New Zealand dollar. The forecasted spot rate of the NZ$ in 90 days follows:
|
Future Spot Rate
|
Probability
|
|
$.44
|
30%
|
|
.40
|
50
|
|
.38
|
20
|
Given that you hedge your position with options, make a probability distribution for United State dollars to be received in 90 days.