Your firm is a U.S.-based exporter of bicycles. You have sold an order to a British firm for 1,000,000 worth of bicycles. Payment from the British firm is due in three months. Detail a strategy using the futures contracts that will hedge your exchange rate risk. Have an estimate of how many contracts of what type and how much (in $) your firm will have. Use the most recent forward rate to construct your position.

U.S. S equiv. Currency per U.S. S Tuesday Country Tuesday Monday Monday 1.6000 1.6100 1.6300 1.6600 1 .7200 1.6100 1.6300 1.6600 1.7200 1.8000 0.625 0.6211 0.6173 0.6024 0.5814 0.6211 0.6173 0.6024 0.5814 0.5556 Britain (Pound) 62,500 1 Month Forward rd 6 Months Forward rd 3 Months Forwa 12 Months Forwa