Empirical evidence indicates that the Forward market for foreign currencies is Efficient. You conduct business regularly with a company in Florence Italy and have been inclined to hedge in the Forward market. A UCLA Intern has just brought in hedging data for last quarter's Euro denominated receivables. You generally receive between 6-8 million Euros each month. Spot value Month Beginning Spot 7/1 = $1.12, Spot 8/1 = $1.19, Spot 9/1 = $1.18, F value on Month Beginning for Month End F7/31 7/1 $1.18, F8/31 8/1 = $1.15, F9/1 9/1 = $1.20, Spot value Month End Spot 7/31 = $1.19 Spot 8/31 - $1.17 Spot 9/30 = $1.22 1. Make the case for continuing to employ the Forward market. 2. Make the case for not hedging.