3 Problem 9.3 14.28 Check my work points eBook Ask Suppose you are a British venture capitalist holding a major stake in an e-commerce start-up in Silicon Valley. As a British resident, you are concerned with the pound value of your U.S. equity position. Assume that if the American economy booms in the future, your equity stake will be worth $1,000,000, and the exchange rate will be $1.72 per pound. If the American economy experiences a recession, on the other hand, your American equity stake will be worth $500,000, and the exchange rate will be $1.92 per pound. You assess that the American economy will experience a boom with a 70 percent probability and a recession with a 30 percent probability. Required: a. Estimate your exposure to the exchange risk. b. Compute the variance of the pound value of your American equity position that is attributable to the exchange rate uncertainty. Print c-1. How would you hedge this exposure? References c-2. If you hedge, what is the variance of the pound value of the hedged position? Complete this question by entering your answers in the tabs below. Required A Required B Required C1 Required C2 Estimate your exposure to the exchange risk. Note: Do not round intermediate calculations. Round final answer to nearest dollar. Exposure