What method of hedging do you recommend to the mnc

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Reference no: EM13219218

An American MNC anticipates a receipt of 850,000,000 Japanese yen on Mach 27. The company expects the Japanese yen to appreciate in the following months. Despite that because of its dollar obligations in that month it does not want to leave its long position on the yen unprotected. The company wants to hedge its position on this foreign currency. You are given the following information: a. The bid/ask forward contract quote the company receives from it bank is $0.0112/$0.0113 b. On the strike price of $1.136 per 100 units of yen The price of a put option is 2.3 cents per 100 yen The price of a call option is 3.5 cents per 100 yen What method of hedging do you recommend to this MNC?

Reference no: EM13219218

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