How much of the volatility of the dollar value of the British asset can be removed by hedging exchange risk? a. 2,500 ($)^2 b. 125,000 ($)^2 c. 127,500 ($)^2 d. None of the above

(The following information applies to the next four problems.) A U.S. firm holds an asset in Great Britain and faces the following sce where, P= Pound sterling price of the asset held by the U.S. firm P= dollar price of the same asset