Assume you are the CFO of AIFS. Your analyst reports the following information (Use the following information for the remainder of the assignment): Current exchange rate is $1.16/. Forward rate is $1.175/. Expected final sales volume is 35,000. Worst case scenario is volume of 15,000. Best case scenario is volume of 50,000. Cost per student is 2000. Option premium is 2% of USD strike price. Option strike price is $1.165/

10. What is the most profitable strategy for expected final sales volume is 35,000 and for the worst-case scenario volume of 15,000 (no hedge, forward contract, or option contract)

a) if the exchange rate remains at $1.16/? b) if the exchange rate will be $1.25/? c) if the exchange rate will be $1.11/? d) What is the overall best strategy? Why?