the current anwser on chegg does not properly address a b and c

6. (20 points) Suppose a U.S. firm has an asset in Germany and faces the following scenario: + State 1 1 2 3 4 Probability 1/4 1/4 1/4 1/4 P* 980 1,000 1,070 1,190 S $1.40/ $1.50/ $1.60/ $1.70/ SxP* $1,372 $1,500 $1,712 $2,023 In the above table, P is the euro price of the asset held by the U.S. firm and P is the dollar price of the asset. a. Compute the exchange exposure faced by the U.S. firm (for each case). b. What is the variance of the dollar price of this asset if the U.S. firm remains unhedged against this exposure? c. If the U.S. firm hedges against this exposure using the forward contract, what is the variance of the dollar value of the hedged position? 6. (20 points) Suppose a U.S. firm has an asset in Germany and faces the following scenario: + State 1 1 2 3 4 Probability 1/4 1/4 1/4 1/4 P* 980 1,000 1,070 1,190 S $1.40/ $1.50/ $1.60/ $1.70/ SxP* $1,372 $1,500 $1,712 $2,023 In the above table, P is the euro price of the asset held by the U.S. firm and P is the dollar price of the asset. a. Compute the exchange exposure faced by the U.S. firm (for each case). b. What is the variance of the dollar price of this asset if the U.S. firm remains unhedged against this exposure? c. If the U.S. firm hedges against this exposure using the forward contract, what is the variance of the dollar value of the hedged position