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we finished with a discussion of hedging in the exchange rate market the currencies I have two examples from the financial markets and then I would like to explain the concept of an optimal hedge which will be our last topic on the hedging side so lets sort of introduced this example last week and its very common in a financial sector here we have a situation where a savings alone or a bank or something like that a financial institution agrees to purchase some home mortgages and I have the value set at 1 million dollars and in todays market thats not many houses okay a couple of houses in Davis so this a bank or SNL agrees to purchase the mortgages from the building contractor the contractors under construction hes building these homes and is concerned that the interest rates might rise because the rates are at an attractive level and he knows that he can sell the property as long as he can offer the buyer a mortgage at a reasonable level so if the interest rates are currently at