Question: Cray Research (a U.S firm) purchased a super computer from the Max Planck Institute in Germany on credit and invoiced 10,000,000 payable in six months.

Cray Research (a U.S firm) purchased a super computer from the

Cray Research (a U.S firm) purchased a super computer from the Max Planck Institute in Germany on credit and invoiced 10,000,000 payable in six months. Currently, the six-month forward exchange rate is $1.198/ and the foreign exchange advisor for Cray Research predicts that the spot rate is likely to be $1.226/ in six months. (a) What is the expected gain/loss from the forward hedging? (measured in $

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