Suppose that you hold a piece of land in the City of London that you may want to sell in one year. As a U.S. resident, we are concerned with the dollar value of the land. Assume that, if the British economy booms in the future, the land will be worth 2,000 and one British pound will be worth $1.50. If the British economy slows down, on the other hand, the land will be worth less, i.e., 3,500, but the pound will be stronger, i.e., $1.40/. You feel that the British economy will experience a boom with a 55% probability and a slow-down with a 45% probability. Estimate your exposure b to the exchange risk. 3,855.00 3,855.00 19,000.00 19,000.00 Question 19 2.5pts Same facts as above: what is the variance of the dollar price of this asset if the U.S. firm remains unhedged against this exposure. $1,924,259.98 $3,855.00 $893,475.00 $513,294.39 Same facts as above: which of the following is the best way to hedge your exchange risk exposure? Enter a forward contract to buy 19,000 Enter a forward contract to sell 19,000 Enter a forward contract to buy 3,855 Enter a forward contract to sell 3,855