A French firm is considering a one-year investment in the United Kingdom with a pound- denominated rate of return of i = 15%. The firm's local cost of capital is i = 10%. The project costs 1,000 and will return 1,150 at the end of one year. The current exchange rate is 2.00 = 1.00 Suppose that the bank of England is considering either tightening or loosening its monetary policy. It is widely believed that in one year there are only two possibilities: S1 () 2.20 per S1 () = 1.80 per Following revaluation, the exchange rate is expected to remain steady for at least another year. Using the notion of a hedge ratio, make a recommendation vis--vis how to undertake the project today without "buying" the option