(b) What is the hedge ratio? Why would the hedge ratio ever be less than one? (5 marks) (c) Columbus of Spanol Capital believes the Swiss franc will appreciate versus the U.S. dollar in the coming three-month period. He has $100,000 to invest. The current spot rate is $0.5820/SF, the three-month forward rate is $0.5640/SF, and he expects the spot rates to reach $0.6250/SF in three months. 1. Assuming his prediction is right, calculate Columbus's expected profit if he has used a pure spot market speculation strategy. (4 marks) ii. Assuming his prediction is right, calculate Columbus's expected profit if he has bought or sold SF three months forward. (6 marks)