2 Suppose that you were importing small electric transformers, that delivery from all suppliers would take approximately 6 months, and that you faced the situation shown in the table below:

United States Canada Great Britain Switzerland Germany Local cost $20,000 Can$22,000 £10,000 SFr 22,000 ¤18,000 S($/j) 1 0.84 2.00 0.80 1.20 S
1/2($/j) 1 0.82 2.05 0.79 1.22 F1/2($/j) 1 0.83 2.02 0.81 1.24 a Where would you buy if you decided on forward hedging?
b Where would you buy if you decided on being unhedged?
c If you knew that your own expected future spot rates were also the market’s expected spot rates, could you deduce from the table if there is a forward-risk premium?