The following information is used for the next THREE questions: B.D. Energy is a firm in the resource extraction industry that is headquartered in the United Kingdom. The firm has a AUD1,971,670 obligation to a supplier that must be paid exactly 55 days from today (at t=55 ). As Chief Financial Officer of B.D. Energy, you are evaluating several alternatives for hedging this Australian dollar obligation. Today's spot rate is GBP1.1169/AUD. One alternative under consideration is a forward contract priced at GBP1.0942/AUD, which your banker has tailored to perfectly match your underlying Australian dollar exposure. Alternatively, futures contracts on the Australian dollar are available that matures in exactly 60 days (at t=60) and are currently priced at GBP1.0921/AUD. Each futures contract on the Australian dollar has a size of AUD62,500. The below table shows the prices of the above futures contract and the spot rate in the period around the payment of your obligation. All values are the closing prices for that day. Your policy when hedging with derivatives is to use the nearest whole number of contracts to the value of your exposure and to close out any position on the day of the underlying transaction. Question 5 If you hedged with the forward contract, what is the realized British pound value of your obligation on its payment date? a. GBP2,157,401.31 b. GBP2,161,541.82 c. GBP2,158,978.65 d. GBP2,157,598.48 e. GBP2,153,260.81 If you hedged using futures, what is the realized British pound value of your obligation on its payment date? a. GBP2,153,260.81 b. GBP2,155,741.82 c. GBP2,157,204.15 d. GBP2,157,598.48 e. GBP2,157,141.82 If you hedged using futures, how much better (+) or worse () off in British pound are you than if you had hedged with a forward contract? a. +GBP259.49 b. +GBP197.17 c. - GBP197.17 d. +GBP4,140.51 e. +GBP1,659.49