3. Biogen expects to receive royalty payments totaling 1.25 million next month. It is interested in protecting these receipts against a drop in the value of the pound. It can sell 30-day pound futures at a price of $1.6513 per pound or it can buy pound put options with a strike price of $1.6612 at a premium of 2.0 cents per pound. The spot price of the pound is currently $1.6560, and the pound is expected to trade in the range of $1.6250 to $1.7010. Biogen's treasurer believes that the most likely price of the pound in 30 days will be $1.6400. a. How many futures contracts will Biogen need to protect its receipts? How many options contracts? b. Diagram Biogen's profit and loss associated with the put option position and the futures position within its range of expected exchange rates (see Exhibit 8.6). Ignore transaction costs and margins. c. Calculate what Biogen would gain or lose on the option and futures positions within the range of expected future exchange rates and if the pound settled at its most likely value. d. What is Biogen's break-even future spot price on the option contract? On the futures contract? e. Calculate and diagram the corresponding profit and loss and break-even positions on the futures and options contracts for those who took the other side of these contracts.