Boeing sells an airplane to Korean Airlines for 840 million won with terms of 1 year. Boeing will receive its payment in Korean won. The spot rate for the Korean currency is 700 won per dollar and Boeing expects to exchange 840 million won for $1.2 million (840 million

Π 700) when payment is received.

(a) If the spot rate for won rises to 600 won per dollar 1 year from today, what is the potential transaction gain or loss?

(b) If the spot rate for won declines to 1,000 won per dollar at maturity, what is the potential transaction gain or loss?