ColbyCo. imports goods to the U$.$S$.$ from the Eurozone. The company is due to make a payment in $60$ days of EUR $60$ million. It is concerned that the U$.$S Dollar will depreciate against the Euro over this period and would like to hedge its currency risk with futures. The current spot rate is $0\mathrm{.}9503$ USD$/$EUR$.$

Information on EUR$-$USD Future:

$\backslash$table$[[$Futures price $($USD$/$EUR$)$:$,0\mathrm{.}9546],[$Contract size,EUR $150,000]]$

a$.$ Calculate the futures position needed to hedge ColbyCo's liability.

In $60$ days the exchange rate is USD$/$EUR $0\mathrm{.}9621$ and the futures price is USD$/$EUR $0\mathrm{.}9641.$

b$.$ Calculate the cost to ColbyCo if it leaves its euro liability unhedged.