Question: Using the data given for British Pound futures contracts design a suitable hedge that would minimize Pre-Fabs exposure to fluctuations in the exchange rate between

Using the data given for British Pound futures contracts design a suitable hedge that would minimize Pre-Fab’s exposure to fluctuations in the exchange rate between the US$ and the British Pound. Explain the results of the hedge if by September 2005, when payment is received from the British wholesalers, the exchange rate goes to $1.350 per British Pound.

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