".2 You have just received good news. You have a rich uncle in France who has decided to give you a monthly annuity of 2,0D per month. You are concerned that you will become accustomed to having these funds. but it the currency exchange rate moves against you. you may have to make do with tess. A. If you are living in Canada. what does it mean for the currency exchange rate to move against you? E. Would moving to France mitigate some of the risk? If so. how? If not. why not? C. If you want to stay in Canada. and your grandparents, who have retired to Provence. receive a Canadian pension ofC$11u each. what could you do to reduce the risk for all of you? [9 marks} ".3 You have learned about a number of ways of reducing risk. specifically hedging. insuring. and diversifying. In the table below, place an X in the cell for the technique being used to reduce risk. Hedging Insuring Diversifying I Placing an advance order with Amazonca. which agrees to charge you the lower of the advance price. and the price at the time your order is lled. Purchasing a call option on a stock you think may go up in price. IU 3 Selling 200 shares of IBM and buying a mutual fund that holds the same stocks as the S&P index. 1 Selling a debt owed to you for $.50 per dollar owed. lL." Agreeing to a long-term contract with a :NCF snow Agninnment 3 JHHIIFIW Fl $311121