1. ABC Corporation negotiated a forward contract to sell C$100,000 in one year at a forward rate of C$1=$0.80. On the delivery date, the spot rate was C$1=$0.83. a. How much is the revenue ABC Corporation can get from the forward hedge? b. What is the real cost of hedging receivables for this U.S. firm? 2. Given the following additional information Future Spot rate RCHE 0.78 -2000 Prob. 0.20 0.81 1000 0.50 0.83 3000 0.30 a. What is the probability that the forward hedge will result in higher revenue than no hedge? b. How much is E(RCHr)? Overall, is forward hedge preferred? 5% 3. Lora Corp. needs NZ$100,000 in 180 days. The 180-day forward rate is NZ$1=5.52. Spot rate Prob. $0.40 0.45 10% 0.48 30% 0.50 30% 0.53 20% 0.55 5% a. What is the probability that the forward hedge will result in higher cost than no hedge? b. How much is E(RCHp)? Overall, is forward hedge preferred