1-2. Fannie Mae, the largest mortgage lender in the United States, has substantial outstanding debt and uses hedging techniques to manage its exposure to changing interest rates. Fannie Mae posted a 15% earnings gain for the 3rd quarter of 20X7. The company reported a loss of about $60 million, attributed to a hedging strategy that lost money. However, the company was able to offset the loss by repurchasing debt at favorable rates, which produced a one-time gain of $32.7million. Some analysts argue that such gains should be omitted when a company calculates its earnings-per-share results. But Fannie Mae says that it considers retirement of debt to be part of its continuing operations. Required: a) Present one reason why the gain from debt retirement should be considered part of Fannie Mae's operating earnings and one reason why it should not. b) Present one reason why the loss from the hedging strategy should be considered part of Fannie Mae's operating earnings and one reason why it should not. c) Recommend the proper treatment for gains/losses from debt retirement, from an analyst viewpoint, and justify your recommendation