Question: QUESTION 2 Use the following information to answer the next two questions. An American company will receive 80 million euros in 6 months. The current

QUESTION 2 Use the following information to answer the next two

QUESTION 2 Use the following information to answer the next two questions. An American company will receive 80 million euros in 6 months. The current spot rate is $1.15/euro and the 6 month forward rate is $1.4/euro. The company should sell a forward contract on 80 million euros to hedge its exchange rate risk. O True O False QUESTION 3 Find the company's profit/loss (in dollars) from its forward contract if the spot rate is .625/$ at expiration. 20,000,000 O -20,000,000 O 16,000,000 O -16,000,000 O None of the above

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