Assume that Fox Co. will need to purchase 100,000 Singapore dollars (S$) in 180 days.

Assume that Fox Co. will need to purchase 100,000 Singapore dollars (S$) in 180 days. Today's spot rate of the S$ is $.50, and the 180-day forward rate is $.53. A call option on S$ exists, with an exercise price of $.52, a premium of $.02, and a 180-day expiration date. A put option on S$ exists, with an exercise price of $.51, a premium of $.02, and a 180-day expiration date. Fox has developed the following probability distribution for the spot rate in 180 days:

Possible Spot Rate     Probability

$.48                          10%
$.53                          60%
$.55                          30%


The probability that the forward hedge will result in a higher payment than the options hedge is ___.
(Including the amount paid for the premium when estimating the U.S. dollars required for the options hedge).

a. 10%
b. 30%
c. 40%
d. 70%