1. Hedging with forward contracts 2. Suppose that Retrojo Inc. is a U.S. based MNC that will need to purchase F $1.10 million (Fijian dollars, F$ ) worth of imports from in 90 days. Currently, the spot rate for the Fijian dollar is $0.54 per F$. If Retrojo were to exchange U.S. dollars for the required F$1,100,000.00 Fijian dollars, it would need (U.S. dollars). If Retrojo waits 90 days to make this exchange (perhaps due to insufficient funds on hand), and the Fijian dollar appreciates $0.67 during those days, then Retrojo would need (U.S. dollars). Thus, if Retrojo believes that the Fijian dollar will appreciate, it can its exposure to such exchange rate risk by locking in the original exchange rate through the use of a forward contract. TOTAL SCORE: 0/2 (to complete this step and unlock the next step)