Here is the question:

A U.S. firm holds an asset in Great Britain and faces the following scenario: State 1 State 2 State 3 Probability 25% 50% 25% Spot rate $2.50/E $2.00/E $1.60/t $1,800 (2.250 (2,812.50 Where P* = Pound sterling price of the asset held by the U.S. firm The CFO decides to hedge his exposure by selling forward the expected value of the pound denominated cash flow at F1($/f) = $2/f. As a result The firm's exposure to the exchange rate is made worse. None of the above He has a nearly perfect hedge. O He has a perfect hedge