A U.S. firm holds an asset in Great Britain and faces the following scenario: State 1 State 2 State 3 Probability 25% 50% 25% Spot rate $2.20/ $2.00/ $1.80/ p* 2,000 2,500 3,000 P $4,400 $5,000 $5,400 where, pe = Pound sterling price of the asset held by the U.S. firm, and P = Dollar price of the same asset. The variance of the exchange rate is 0.02, and the covariance is -50. Which of the following would be an effective hedge? Select one: a. Sell 2,500 forward at the 1-year forward rate, F1($/), that prevails at time zero. b. Sell 25,000 forward at the 1-year forward rate, F1($/), that prevails at time zero O c. Buy 2,500 forward at the 1-year forward rate, F1($/), that prevails at time zero. d. Buy 25000 forward at the 1-year forward rate, F1($/), that prevails at time zero