Question: please help if you know the correct answer Suppose that you hold a piece of land in the City of London that you may want

please help if you know the correct answer
please help if you know the correct answer Suppose that you hold

Suppose that you hold a piece of land in the City of London that you may want to sell in one year. As a U.S. resident, you are concerned with the dollar value of the land. Assume that, if the British economy booms in the future, the land will be worth 2,000 and one British pound will be worth $1.40. If the British economy slows down on the other hand, the land will be worth less, i.e., 1,500, but the pound will be stronger, i.e., $1.50/. You feel that the British economy will experience a boom with a 60% probability and a slow-down with a 40% probability. Assume that economic exposure measured by beta (b) is -5500. What's your risk and how could you hedge your risk in forward markets? My risk is pound appreciation and I should sell 5500 in forward market. My risk is pound depreciation and I should buy 5500 in forward market. My risk is pound depreciation and I should sell 5500 in forward market. My risk is pound depreciation and I should buy $5500 in forward market. My risk is pound appreciation and I should sell $5500 in forward market. My risk is pound appreciation and I should buy 5500 in forward market

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