You could use a PUT options contract to protect your company against the risk of losses associated with the potential depreciation of the Japanese Yen. In your answers below, assume that the current spot rate is 0.012 US dollars per Yen, and that the future rate is expected to be 0.009 US dollars per Yen. Your striking price is 0.01 US dollars per Yen.

c) If the premium is $.0003 per yen (or .0003 dollars per yen), what is the total cost of the Put option contract?

d) If the spot rate in 180 days is .011, do you exercise the option or let it expire?

i. What was your dollar gain or loss from holding the option contract?

e) If the spot rate in 180 days is 0.009 US dollars per Yen as you predicted, do you exercise the option or let it expire?

i. What is the net gain or loss from the contract (measured in dollars)?