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If Starting date - Friday November the 2nd, 2007 Expiry date - End of January 2008 Purchase - USD 7.5M (on January 31st. 2008) Spot

If Starting date - Friday November the 2nd, 2007

Expiry date - End of January 2008

Purchase - USD 7.5M (on January 31st. 2008)

Spot rate - 0.9351- November 2nd. = USD = 0.9351 CAD

Premium fee 1.73% of Face value

Forward rate - 0.93499 (ASK). Then,

Calculate the impact of the two hedging strategies and the unhedged position under the following three scenario at the end of January:

A. USD=CAD

B. USD= 0,90 CAD

C. USD= 1,10 CAD

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