Question: WeRSlightlyNervous, a US-based MNC, will need 500,000 a year from now, and decides to lock into a rate of 2.00$/ and purchase a forward contract

WeRSlightlyNervous, a US-based MNC, will need 500,000 a year from now, and decides to lock into a rate of 2.00$/ and purchase a forward contract right now. A year later, at the time when the delivery on the forward contract is made, the spot exchange rate turns out to be 1.95$/. The company, by purchasing the forward contract instead of waiting to buy the at the spot rate, (saved/lost) $_________.

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