Transcribed Image Text: A US company has land in Sydney that will likely be sold in the next year. There are two possible states of the world. With a probablity

Transcribed Image Text: A US company has land in Sydney that will likely be sold in the next year. There are two possible states of the world. With a probablity
BO% the exchange rate will be $1.4000 / AS. In this case the land will be worth A$4,000.000. With a probability 20% the exchange rate
will be $1.5260 / AS and the land will be worth A$3.600,000. How would you use financial hedging to hedge this exposure
Sell AS827.556 forward
Buy AS844,444 forward
Sell AS3.600.000 forward
Buy AS4.000.000 forward
None of the alternatives

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