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 States. The firm has a CHF891,590 receivable that will be paid by the customer exactly 55 days from today (at t=55). As Chief Financial Officer of B.D. Energy, you are evaluating several alternatives for hedging this Swiss franc receivable. Today's spot rate is USD1.0743/CHF. One alternative under consideration is a forward contract priced at USD1.0580/CHF, which your banker has tailored to perfectly match your underlying Swiss franc exposure. Alternatively, futures contracts on the Swiss franc are available that matures in exactly 60 days (at =60) and are currently priced at USD1.0565/CHF. Each futures contract on the Swiss franc has a size of CHF62,500. The below table shows the prices of the above futures contract and the spot rate in the period around the payment of your receivable. All values are the closing prices for that day. Day Spot Price Futures Price t=55 USD1.0379/CHF USD1.0365/CHF t=56 USD1.0368/CHF USD1.0356/CHF 1=57 USD1.0373/CHF USD1.0364/CHF t=58 USD1.0353/CHF USD1.0347/CHF t=59 USD1.0366/CHF USD1.0363/CHF t=60 USD1.0348/CHF USD1.0348/CHF 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