3. The Ice Rider Manufacturing makes snowmobiles, some of which it sells to Japan for recreation in the wilderness of the northern islands. Ice Rider is expecting a payment of 9 million in six months.

a. Draw a timeline illustrating the underlying transaction.

b. Draw a payoff profile of the underlying transaction with dollars-per-yen on the axes.

c. Suppose Ice Rider takes out a forward contract to hedge this transaction. Describe this contract.

d. Describe the advantages/disadvantages to Ice Rider if Ice Rider takes out a futures contract instead of a forward contract.