Question: The current exchange rate is 1.50 $/, and 3-month forward exchange rate is 1.55 $/. The 3-month interest rate in US is 5%, and the

The current exchange rate is 1.50 $/, and 3-month forward exchange rate is 1.55 $/. The 3-month interest rate in US is 5%, and the 3-month interest rate in France is 3%. Assume you are a trade who demands 1 million Euro in 3 months. 2. Please explain the foreign exchange rate risk that you face. (no more than 100 words) 3. Please describe how to use the forward contract to hedge the risk. (no more than 100 words) 4. Please describe how to use the futures contract to hedge the risk. (no more than 100 words) 5. Please describe how to use the option contract to hedge the risk. (no more than 100 words)

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