1. The following graph represents the hedging options for an accounts receivable in British pounds. Give the correct hedging decision for each of the following risk and expected spot price scenarios:
   1. Risk averse and expected spot at expiration is $1.44
   2. Risk averse and expected spot at expiration is $1.50
   3. Risk averse and expected spot at expiration is $1.57
   4. Risk tolerant and expected spot at expiration is $1.44
   5. Risk tolerant and expected spot at expiration is $1.50
   6. Risk tolerant and expected spot at expiration is $1.57

Accounts Receivable in British Pounds Strike = $1.50, call premium = $.0177, put premium = $.0284 1.6 1.58 1.56 1.54 1.52 1.5 -1.48 1.46 1.44 1.42 1.4 1.42 1.43 1.44 1.45 1.46 1.47 1.48 1.49 1.5 1.51 1.52 1.53 1.54 1.55 1.56 1.57 1.58 Spot price at expiration unhedged buy fwd buy put sell call Accounts Receivable in British Pounds Strike = $1.50, call premium = $.0177, put premium = $.0284 1.6 1.58 1.56 1.54 1.52 1.5 -1.48 1.46 1.44 1.42 1.4 1.42 1.43 1.44 1.45 1.46 1.47 1.48 1.49 1.5 1.51 1.52 1.53 1.54 1.55 1.56 1.57 1.58 Spot price at expiration unhedged buy fwd buy put sell call