3. You are buying a boat from a company that builds custom boats. You would like a boat with catalog price of $60,000 and would like delivery on May 1, 2019 (about one year away). As the company you are buying from operates from an offshore island location, they prefer all payments be in Bitcoin. You negotiate a deal with the company to buy the boat for $10,000 in cash today as a down payment and a payment of 6 Bitcoins in May 2019 when the boat is delivered. (a) Explain the currency risk you are taking with this contract (b) Describe (in general) hedging the risk above using a forward contract. (c) Describe two differences from part (b) if you hedge the above using futures contracts at the CME group. (d) Draw a diagram showing the hedge in part (b) using a forward contract. Your diagram should show the range of payoffs from the unhedged position, the hedge instrument and the net position 3. You are buying a boat from a company that builds custom boats. You would like a boat with catalog price of $60,000 and would like delivery on May 1, 2019 (about one year away). As the company you are buying from operates from an offshore island location, they prefer all payments be in Bitcoin. You negotiate a deal with the company to buy the boat for $10,000 in cash today as a down payment and a payment of 6 Bitcoins in May 2019 when the boat is delivered. (a) Explain the currency risk you are taking with this contract (b) Describe (in general) hedging the risk above using a forward contract. (c) Describe two differences from part (b) if you hedge the above using futures contracts at the CME group. (d) Draw a diagram showing the hedge in part (b) using a forward contract. Your diagram should show the range of payoffs from the unhedged position, the hedge instrument and the net position