You have a $4,000,000$ Norwegian Krone payable. You decide to hedge with a futures contract.

You can buy or sell two $2,000,000$ Krone futures contracts at $$\frac{0\mathrm{.}0954}{N}OK$

a$.$ Assuming you are unhedged, are you concemed that the spot rate will increase or decrease?

b$.$ To hedge your exposure, would you buy or sell a futures contract?

c$.$ Assume the price of the Krone decreases to $$\frac{0\mathrm{.}0945}{N}OK$ by the time you pay the Krone Calculate the gain$/$loss on the futures contracts.

d$.$ Calculate the amount of just the payable $($assuming no futures contracts$).$

e$.$ Calculate the net amount you would pay $c+d.$