Question: Refer to Exhibit T9.1. Draw a risk profile (v/$ versus s/$) for each of the following: a. Bernd's underlying currency risk exposure b. a currency

Refer to Exhibit T9.1. Draw a risk profile (v€/$ versus s€/$) for each of the following:
a. Bernd's underlying currency risk exposure
b. a currency forward hedge of Bernd's exposure
c. the exposure of the net (or hedged) position
Exhibit T9.1
Bernd lives in Berlin and uses the euro as his currency of denomination. Bernd has an accounts payable balance of $10 million due in three months. The spot exchange rate is S€/$ = €1.20/$.

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