Please Explain in detail why did we chose a long/short position::::Your firm is a U.K.-based exporter of bicycles. You have sold an order to a French firm for 1,000,000 worth of bicycles. Payment from the French firm (in euro) is due in 12 months. Detail a strategy using futures contracts that will hedge your exchange rate risk. Have an estimate of how many contracts of what type and maturity. U.S. $ equiv. Currency per U.S. $ Contract Size Country Tuesday Monday Tuesday Monday Britain 10,000 $ 1.9600 $ 1.9400 0.5102 0.5155 (pound) 1 month $ 1.9700 $ 1.9500 0.5076 0.5128 forward 3 months $ 1.9800 $ 1.9600 0.5051 0.5102 forward 6 months $ 1.9900 $ 1.9700 0.5025 0.5076 forward 12 months forward 10,000 Euro 1 month $ 1.6000 $ 1.5800 0.6250 0.6329 SFr. 10,000 $ 0.9200 $ 0.9000 SFr. 1.0870 1.1111 SFr $ 0.9400 $ 0.9200 SFr. 1.0638 1.0870 SFr $ 0.9600 $ 0.9400 SFr. 1.0417 1.0638 SFr $ 0.9800 $ 0.9600 SFr. 1.0204 1.0417 $ 1.0000 $ 0.9800 SFr. 1.0000 SFr 1.0204 . A) Go short 100 12-month euro futures contracts; and short 80 12-month pound futures contracts. B) Go long 100 12-month euro futures contracts; and long 80 12-month pound futures contracts. C) Go long 100 12-month euro futures contracts; and short 80 12-month pound futures contracts. D) Go short 100 12-month euro futures contracts; and long 80 12-month pound futures contracts. E) none of the options forward 3 months forward 6 months forward 12 months forward Swiss franc 1 month forward 3 months forward 6 months forward 12 months forward $ 2.0000 $ 1.9800 0.5000 0.5051 $ 1.5600 $ 1.5400 0.6410 0.6494 $ 1.5700 $ 1.5500 0.6369 0.6452 $ 1.5800 $ 1.5600 0.6329 0.6410 $ 1.5900 $ 1.5700 0.6289 0.6369