Cray Research sold hi-end computer system to the Max Planck Institute in Germany on credit and invoiced 10 million payable in six months. Currently, the six-month forward exchange rate is $1.10/ and the foreign exchange advisor for Cray Research predicts that the spot rate will probably become $1.05/ in six months.

d. Suppose now that the future spot exchange rate is estimated to be $1.17/. Would you recommend hedging? Why or why not?