What is the probability that the forward hedge will result


You are the treasurer of Arizona Corporation and must decide how to hedge (if at all) future receivables of 350,000 Australian dollars (A$) 180 days from now. Put options are available for a premium of $0.02 per unit and an exercise price of $0.50 per Australian dollar. The forecasted spot rate of the Australian dollar in 180 days is:

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The 180-day forward rate of the Australian dollar is $0.50.

What is the probability that the forward hedge will result in more dollars received than the options hedge?

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Financial Management: What is the probability that the forward hedge will result
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