Expected (S) = $1.23 / (S is the $/ exchange rate) Variance (S) = 0.01 Expected (P) = $1,600 (P is the dollar price of the asset) Variance (P) = 250,435 Covariance (P,S) = 48 (P and the value of the pound are positively correlated.) a) What is Bambi's foreign exchange exposure from its asset in Britain? And how can Bambi hedge this exposure using a forward contract? b) What percentage of the foreign exchange risk can Bambi eliminate by the above forward hedging ? Expected (S) = $1.23 / (S is the $/ exchange rate) Variance (S) = 0.01 Expected (P) = $1,600 (P is the dollar price of the asset) Variance (P) = 250,435 Covariance (P,S) = 48 (P and the value of the pound are positively correlated.) a) What is Bambi's foreign exchange exposure from its asset in Britain? And how can Bambi hedge this exposure using a forward contract? b) What percentage of the foreign exchange risk can Bambi eliminate by the above forward hedging