15. a. What is a non-deliverable forward contract? And how does it work to clear the international transaction? (6 pts) b. Suppose that one U.S. MNC, through an international trade transaction with a Chinese MNC, will receive CNY 12,000,000 in 3 months. However, due to the Chinese government's capital control, the transaction won't be completed with the full payment. Therefore, two parties agree to settle this transaction down with the non-deliverable forward contract. Show how this non- deliverable forward contract works and also show the profit, if any, with the spot exchange rate at maturity date of $0.1782/CNY and 3-month forward rate is $0.1775/CNY. (8 pts) 15. a. What is a non-deliverable forward contract? And how does it work to clear the international transaction? (6 pts) b. Suppose that one U.S. MNC, through an international trade transaction with a Chinese MNC, will receive CNY 12,000,000 in 3 months. However, due to the Chinese government's capital control, the transaction won't be completed with the full payment. Therefore, two parties agree to settle this transaction down with the non-deliverable forward contract. Show how this non- deliverable forward contract works and also show the profit, if any, with the spot exchange rate at maturity date of $0.1782/CNY and 3-month forward rate is $0.1775/CNY. (8 pts)