Question: 17. Based on the information in the table below, what is the proper financial hedging strategy with forwards? (10 points) State Probability p* S Dollar

17. Based on the information in the table below, what is

17. Based on the information in the table below, what is the proper financial hedging strategy with forwards? (10 points) State Probability p* S Dollar Sell Forward at Buy euros $ spent in spot Overall $ Value 300 euros from Spot market Cash Flow in $1.50/euros market hedging 1 1 1/3 700 $4500 $1.25/ $875 $1 50/ $1500 2 1/3 1 000 $4500 3 1/3 1.300 $1.75/ $2275 $4500

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