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Consider this 1-yr forecast with three equally probable scenarios: Price vehicles sold Spot FX SO 1-yr Forward Spot FX S1- Cost 25,000 5,000 5,0000 $100,000

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Consider this 1-yr forecast with three equally probable scenarios: Price vehicles sold Spot FX SO 1-yr Forward Spot FX S1- Cost 25,000 5,000 5,0000 $100,000 $100,000 $100,000 1.25$/Euro 1.25$/Euro 1.25$/Euro 1.38$/Euro 1.38$/Euro 1.38$/Euro yr 1.25$/E 1.45$/E 1.10$/E E 50,000 E 50,000 E 50,000 Design a one-year hedge strategy using either Forwards or Options contracts: meaning, choose the contract type, choose the amount you want to hedge. Assume the option premium is $0.1 per euro, and the strike is 1.25$/Euro. Premium is paid today. Consider this 1-yr forecast with three equally probable scenarios: Price vehicles sold Spot FX SO 1-yr Forward Spot FX S1- Cost 25,000 5,000 5,0000 $100,000 $100,000 $100,000 1.25$/Euro 1.25$/Euro 1.25$/Euro 1.38$/Euro 1.38$/Euro 1.38$/Euro yr 1.25$/E 1.45$/E 1.10$/E E 50,000 E 50,000 E 50,000 Design a one-year hedge strategy using either Forwards or Options contracts: meaning, choose the contract type, choose the amount you want to hedge. Assume the option premium is $0.1 per euro, and the strike is 1.25$/Euro. Premium is paid today

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