#1 : Suppose you call locally and a get a quote for the Euro at: $1.37/Euro. You then call your broker in Germany and request the same quote but this time you get: 0.7353Euro/S. What would you do if you were looking for some profit opportunities? What would be the risk in conducting this transaction? Papa Mienhoff Bakes Strudel #2: Papa Mienhoff's of Leipzig Germany has sent you a confirmation for a large order worth 100 Million Euro's for baking materials required for the production of Strudel. The terms are Down: 40 Million Euros 30 Day Payment: 30 Million Euros 60 Day Payment: 30 Million Euros Payment will be made in Euros. The Spot and Forward rates are Spot: S1.4635/Euro 30 Day: $1.4555/Euro 60 day: S1.4450/Euro borrowing is: 4%. For 60 day contract at strike price of Euro. The 60 day Put Option premium of 3.7 cents per Euro. The opportunity cost is: 690.30 Day interest for days, 5%. American Put Option contracts are: 30 S1.4650/Euro with the premium at: 2.5 cents per contract has a strike price of S1.4545/Euro with a Which hedging method would you use and why