It is 1 March 2022. ESTF (a UK-based trading house) sold two 10-year-old MR1 tankers to Tankers Ltd. of Spain for a total of 60 million, that is each vessel for 30 million. The amount will be paid (and thus received by ESTF) according to the following schedule: 30 million on 1 June 2022 and 30 million on 1 September 2022. You are given the following information on the 1st of March 2022: (Current) Spot Exchange Rate ( per ): 3-month Forward rate ( per ): 6-month Forward rate ( per ): Bid-Ask Interest Rate (Euros, ) Bid-Ask Interest Rate (GBP, ) ESTF's Opportunity Cost of Capital Over-The-Counter Options Call Options 3-month Put Options 3-month Call Options 6-month Put Options 6-month 1.18 1.24 1.27 2.0%-4.0% 3.0%-5.0% 8% Strike 1.235 ( per ) 1.235 ( per ) 1.265 ( per ) 1.265 ( per ) Premium 1.2% 1.1% 1.3% 1.2% a) What are the differenthedging strategies available to ESTF to cover its foreign exchange risk? Calculate the possible outcomes of these hedging alternatives using cash flows as expressed on 1 March 2022 and recommend (and comment on) the optimal strategy for each of the two cash flows. It is 1 March 2022. ESTF (a UK-based trading house) sold two 10-year-old MR1 tankers to Tankers Ltd. of Spain for a total of 60 million, that is each vessel for 30 million. The amount will be paid (and thus received by ESTF) according to the following schedule: 30 million on 1 June 2022 and 30 million on 1 September 2022. You are given the following information on the 1st of March 2022: (Current) Spot Exchange Rate ( per ): 3-month Forward rate ( per ): 6-month Forward rate ( per ): Bid-Ask Interest Rate (Euros, ) Bid-Ask Interest Rate (GBP, ) ESTF's Opportunity Cost of Capital Over-The-Counter Options Call Options 3-month Put Options 3-month Call Options 6-month Put Options 6-month 1.18 1.24 1.27 2.0%-4.0% 3.0%-5.0% 8% Strike 1.235 ( per ) 1.235 ( per ) 1.265 ( per ) 1.265 ( per ) Premium 1.2% 1.1% 1.3% 1.2% a) What are the differenthedging strategies available to ESTF to cover its foreign exchange risk? Calculate the possible outcomes of these hedging alternatives using cash flows as expressed on 1 March 2022 and recommend (and comment on) the optimal strategy for each of the two cash flows