$1.$ In October a U$.$S$.$ Company is expecting to have to pay $1,250,000$ British Pounds to its British suppliers in December, and wants to hedge against a rise in the value of the British Pound relative to the U$.$S$.$ dollar in December

At this time the spot exchange rate for a British Pound was $$1\mathrm{.}2126$ USD. The CME Group futures settle rate for December British Pound FX futures contacts is $1$ British Pound $=$ $$1\mathrm{.}2215$ USD, with each futures contract for $62,500$ British pounds per contract.

a$.$ What position and how many contracts should the financial manager take for the hedge? Explain why. $($hint # contracts $=$ Amount of British Pounds Hedging $/62,500$ per contract$),$

Type of Position $\_\_\_\_\_\_\_\_\_\_\_\_($short or long$)$

Explain why

How many contracts should you get?

Number of Contracts$\_\_\_\_\_\_\_\_\_\_$