The importer needs to make the payment in the VND each time so the importer may enter into hedge to protect himself from the appreciation of the VND against the dollar, now if the importer enters into the forward contract of the hedge and he come across the reverse situation that means the VND is depriciating that means if the hedger would not have entered into a forward contract then they would have benefited more.
Lets convert above above rate in per VND rate to understand better.
E_USD/VND = 1/21000 = 0.000048
F_USD/VND = 0.000047
Ee_USD/VND = 0.000045
so as we can see above if we had enter into a hedge contract we have to pay the 0.000047 per VND and if we would not have enter into the contract we would have to pay the 0.000045 per VND hence cost of Hedging is 0.00002 USD per VND.
It'd help if you could sketch this situation. Note that the area of a rectangle is equal to the product of its width and length: A = L W.
Consider the perimeter of this rectangular area. It's P = 2 L + 2 W. Note that P = 40 meters in this problem.
Thus, if we choose to use W as our independent variable, then P = 40 meters = 2 L + 2 W. Let's express L in terms of W. Divide both sides of the following equation by 2: 40 = 2 L + 2 W. We get 20 = L + W. Thus, L = 20 - w.
Then the area of the rectangle is A = ( 20 - W)*W.
Multiply this out. Your result will be a quadratic equation. Graph this quadratic equation (in other words, graph the function that represents the area of the rectangle). For which W value is the area at its maximum?
Alternatively, find the vertex of this graph: remember that the x- (or W-) coordinate of the vertex is given by
W = -b/(2a), where a is the coefficient of W^2 an b is the coefficient of W in your quadratic equation.
Finally, substitute this value of W into your quadratic equation, to calculate the maximum area.
