$8$ IFM $2023-$Aug forward hedging

A US firm holds an asset in France and faces the following scenario:

In the above table, $P^{**}$ is the euro price of the asset held by the $U.S.$ firm and $P$ is the dollar price of

the asset.

a$)$ Compute $($round to $3$ decimals$)$:

mean of spot exchange rate $E(S)$ :

variance of spot exchange rate $=$VAR$(S)$ :

standard deviation of spot exchange rate$=$VAR$($S$)$ :

b$)$ Compute $($round to $1$ decimal$)$:

mean of dolar price of asset $=E(P)$

variance of dolar price of asset $=$Var$(P)$

standard deviation of spot exchange rate $=$VAR$(P)$

covarience $=$cov$(S,P)$

c$)$ Compute the exchange exposure faced by the US firm.

$($Round your answer to integer$)$

d$)$ What is the variance of equity position that is attributable to the exchange rate uncertainty?

$($Round your answer to integer$)$

e$)$ If the US firm hedges against this exposure using the forward contract, what is the variance of

the dollar value of the hedged position?

$($Round your answer to integer$)$