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If a Canadian investor has a 3000 GBP investment in London, and she knows that next year (the time horizon of her investment) the investment
If a Canadian investor has a 3000 GBP investment in London, and she knows that next year (the time horizon of her investment) the investment will be worth 4000 GBP if the future exchange rate is 1.70 CAD/GBP and 3000 GBP if the future exchange rate is 1.60 CAD/GBP, and each of these probabilities is equally likely, the investor can hedge herself by going long (enter positive number) or short (enter negative number with a negative sign) how many GBP in the 1 year forward market? (You may assume the forward rate is 1.65 CAD/GBP).
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