Question: QUESTION 19 Use the information for following problem(s). Firm AAA is located in the U.S.. It has purchase from a Germany firm 1,000,000 worth of

QUESTION 19 Use the information for following problem(s). Firm AAA is located in the U.S.. It has purchase from a Germany firm 1,000,000 worth of product. The payable will be processed a year later. Refer to the following for details. The current spot exchange rate is $1.40/euro The one year forward rate is $1.30/euro Question: If firm AAA locks in the forward hedge at $1.30/euro, and the spot rate when the transaction was recorded on the books was $1.40/euro, this will result in a "foreign exchange accounting transaction "of O loss; euro 50,000 O gain; $100,000 O loss; $100,000 gain; euro 50,000

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