firm will sell its pharmaceutical products in Britain the next year, but the exact amount of the revenues is uncertain as it will depend on the trade deal between UK and US after Brexit. The risk management team of the company comes up with the following scenarios that could realize in one year: State Probability Revenues (P*) S 1 1/3 GBP 980,000 USD/GBP 1.40 2 1/3 GBP 1,000,000 USD/GBP 1.50 3 1/3 GBP 1,070,000 USD/GBP 1.60

Detail the hedging strategy that you would implement by selling the forward (i.e. compute the revenues for the company in each state of the world). Assume 1-year forward rate, F1(USD/GBP) = 1.50