Assume that Patton Co.will receive 100,000 New Zealand dollars (NZ$)in 180 days. Today's spot rate of the NZ$ is $.50,and the 180day forward rate is $.51. A call option on NZ$ exists,with an exercise price of $.52,a premium of $.02,and a 180day expiration date. A put option on NZ$ exists with an exercise price of $.51,a premium of $.02,and a 180day expiration date. Patton Co.has developed the following probability distribution for the spot rate in 180 days:

The probability that the forward hedge will result in more U.S.dollars received than the options hedge is _______ (deduct the amount paid for the premium when estimating the U.S.dollars received on the options hedge).

Question

Assume that Patton Co.will receive 100,000 New Zealand dollars (NZ$) in 180 days. Today's spot rate of the NZ$ is $.50,and the 180day forward rate is $.51. A call option on NZ$ exists,with an exercise price of $.52,a premium of $.02,and a 180day expiration date. A put option on NZ$ exists with an exercise price of $.51,a premium of $.02,and a 180day expiration date. Patton Co.has developed the following probability distribution for the spot rate in 180 days:

The probability that the forward hedge will result in more U.S.dollars received than the options hedge is _______ (deduct the amount paid for the premium when estimating the U.S.dollars received on the options hedge) .

The probability that the forward hedge will result in more U.S.dollars received than the options hedge is _______ (deduct the amount paid for the premium when estimating the U.S.dollars received on the options hedge).

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The Answer of Assume that Patton Co.will receive 100,000 New Zealand dollars (NZ$)in 180 days.  Today's spot rate of the NZ$ is $.50,and the 180day forward rate is $.51.  A call option on NZ$ exists,with an exercise price of $.52,a premium of $.02,and a 180day expiration date.  A put option on NZ$ exists with an exercise price of $.51,a premium of $.02,and a 180day expiration date.  Patton Co.has developed the following probability distribution for the spot rate in 180 days:

The probability that the forward hedge will result in more U.S.dollars received than the options hedge is _______ (deduct the amount paid for the premium when estimating the U.S.dollars received on the options hedge).

Assume That Patton Co