28) Your firm is an Italian exporter of bicycles. You have sold an order to a British firm for£1,000,000 worth of bicycles. Payment from the customer (in pounds sterling) is due in 12months. Detail a strategy using futures contracts that will hedge your exchange rate risk. Have anestimate of how many contracts of what type and maturity.U.S. $ equiv.Currency per U.S. $Contract SizeCountryTuesdayMondayTuesdayMonday£10,000Britain(pound)$1.9600$1.9400£ 0.5102£ 0.51551 monthforward$1.9700$1.9500£ 0.5076£ 0.51283 monthsforward$1.9800$1.9600£ 0.5051£ 0.51026 monthsforward$1.9900$1.9700£ 0.5025£ 0.507612monthsforward$2.0000$1.9800£ 0.5000£ 0.5051€10,000Euro$1.5600$1.5400€ 0.6410€ 0.64941 monthforward$1.5700$1.5500€ 0.6369€ 0.64523 monthsforward$1.5800$1.5600€ 0.6329€ 0.64106 monthsforward$1.5900$1.5700€ 0.6289€ 0.636912monthsforward$1.6000$1.5800€ 0.6250€ 0.6329SFr.10,000Swissfranc$0.9200$0.9000SFr. 1.0870SFr. 1.11111 monthforward$0.9400$0.9200SFr. 1.0638SFr. 1.08703 monthsforward$0.9600$0.9400SFr. 1.0417SFr. 1.06386 monthsforward$0.9800$0.9600SFr. 1.0204SFr. 1.041712monthsforward$1.0000$0.9800SFr. 1.0000SFr. 1.0204
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