Note: Round off calculation upto zero decimal points. 9 Telereal Trillium, a UK Company is in the process of negotiating an order amounting 5.5 million with a large German retailer on 6 month's credit. If successful, this will be first time for Telereal Trillium has exported goods into the highly competitive German Market. The Telereal Trillium is considering following 3 alternatives for managing the transaction risk before the order is finalized. Mr. Grand, the Marketing head has suggested that in order to remove transaction risk completely Telereal Trillium should invoice the German fimm in Sterling using the current EE average spot rate to calculate the invoice amount U Mr. John CE is doubtful about Mr. Grand's proposal and suggested an alternative of invoicing the German firm in and using a forward exchange contract to hedge the transaction risk. Ms. Royce CFO is agreed with the proposal of Mr. John to invoice the German first - in but she is of opinion that Telereal Trillium should use sufficient 6 month sterling future contracts to the nearest whole number) to hedge the transaction risk. Following data is available Spot Rate 1.1980 - 1.1990/ 60-0.55 Euro Cents Following data is available Spot Rate 1.1980 - 1.1990/ 6 months forward points 0.60 -0.55 Euro Cents. 6 month future contract is currently trading a 1.1943/ 6 month future contract size is 70,500 After 6 month Spot rate and future rate 1.1873/ You are required to (a) Advise the alternative you consider to be most appropriate (0) Interpret the proposal of Mr. Grand from non-financial point of view. Note Calculate to the nearest ) the receipt ational Financial Management