Question $1.$ United Shoes exports U$.$S$.-$made shoes to the United Kingdom. Because of this, the firm's value is greater when the U$.$S$.$ dollar is less valuable relative to the British pound. Suppose that it is equally likely that the British pound will be worth US $\backslash (\backslash$$ $1\mathrm{.}40\backslash ),$ US $\backslash (\backslash$$ $1\mathrm{.}50\backslash ),$ or US $\backslash (\backslash$$ $1\mathrm{.}60\backslash )$ next year. Under these scenarios, United Shoes is worth US$\backslash$$$105$ million, US $\backslash (\backslash$$ $140\backslash )$ million, and US $\backslash (\backslash$$ $160\backslash )$ million, respectively. By selling British pounds in the forward market at the current forward price of US $\backslash (\backslash$$ $1\mathrm{.}52\backslash )$ per British pound, the firm will realize for certain a value of US $\backslash (\backslash$$ $138\backslash )$ million next year. Should United Shoes enter into the forward contract?