Question: Problem 3 A U . S . firm sells merchandise today to a British company for 1 0 0 , 0 0 0 . The
Problem A US firm sells merchandise today to a British company for The current exchange rate is $ the account is payable in three months, and the firm chooses to avoid any hedging techniques designed to reduce or eliminate the risk of changes in the exchange rate. If the exchange rate changes to $ the US firm will realize a
of
A gain; $
B loss; $
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