Assigmnent: Analyze each of the alternatives below, and then choose one as your suggested hedging strategy. The possible hedging Choices are: a) Remain unhedged. Evaluate the risks and results of this strategy ($ cost) if the $t turns out to be 1.15, 1.20, 1.25, 1.30, 1.35, 1.40, 1.45. b) State Street forward hedge. Explain the implementation of this hedge and the cash ows at maturity. What is the exchange rate that Wainwright would have to pay if they used this alternative? 1What is the $ cost of the machinery? 1 In the interbank market, dealers quote forward points as pips (1 pip is equai to 0.0001). To derive the outright forward rate, you need to add or subtract the appropriate forward points to or from the spot rate. If the forward hid points