1 describe the forward contract that you would use to hedge

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1. Describe the Forward contract that you would use to hedge the Sep '95 JPYrevenue. What is the implicit loss or gain from using this contract if therealized Spot rate (i.e., the actual St at the future date t) ends up being {(a) 84 JPY/USD; (b) 87 JPY/USD; (c) 90 JPY/USD; (d) 92 JPY/USD.

2. Describe the Option contract that you would use to hedge the Sep '95 JPYrevenue. What is the price of this option? What is the loss orgain from using this contract if the realized Spot rate (i.e., the actual St atthe future date t) ends up being { (a) 84 JPY/USD; (b) 87 JPY/USD; (c) 90JPY/USD; (d) 92 JPY/USD.

Reference no: EM13381862

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