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# Hedging Risk: LeMonde Fixed Price Insurance contract in television marketing deal

See attached files.

Fixed Price Insurance contract - how does it affect the decision to enter into the television marketing deal.

Attachments

Word - Requirements (short)
Excel - Response Example Template

#### Solution Preview

Simulation results with 10000 points
1. Probability that company will loose money in quarter 1=0.0796
The minimum value of the simulated output is (\$129783) and 796 out of 10000 points lie below zero.

2. Probability that company will loose money in quarter 2=0.0726
The minimum value of the simulated output is (\$126,201) and 726 out of 10000 points lie below zero.

3. Probability that company will loose money in quarter 3=0.0698
The minimum value of the simulated output is (\$128,282) and 698 out of 10000 points lie below zero.

4. Probability that company will loose money in quarter 4=0.0727
The minimum value of the simulated output is (128,354) and 727 out of 10000 points lie below zero.

5. Probability that company will loose money in Year=0.0008
The minimum value of the simulated output is (\$158,416) and 8 out of ...

#### Solution Summary

The solution is an extensive report including analysis accompanying the narrative statement.

\$2.19