Money Corp

Money Corp.frequently uses a forward hedge to hedge its Malaysian ringgit (MYR) receivables.For the next month,Money has identified its net exposure to the ringgit as being MYR1,500,000.The 30-day forward rate is $.23.Furthermore,Money's financial center has indicated that the possible values of the Malaysian ringgit at the end of next month are $.20 and $.25,with probabilities of.30 and.70,respectively.Based on this information,what is the expected real cost of hedging receivables

A) $0.
B) -$7,500.
C) $7,500.
D) none of the above

Correct Answer:

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