$6)$ Suppose a U$.$S$.$ firm is exporting soft drinks to Britain. It is scheduled to receive a payment

of $80,000$ pounds in $90$ days. The current spot rate is $1\mathrm{.}2$ pounds$/$$$.$ The U$.$S$.$ firm is also quoted

a $90-$day forward contract for the total receipt at a rate of $1\mathrm{.}1$ pounds$/$$$.$

a$)$ Suppose, the U$.$S$.$ firm does not take out a forward contract. If they expect the spot rate

to remain unchanged, how many dollars does it expect it will receive?

b$)$ Suppose, the U$.$S$.$ firm does take out a forward contract. Now how many dollars will it

receive?

c$)$ Suppose that the U$.$S$.$ firm does sign the forward contract. After $90$ days, a dollar turns out

to be equal to $0\mathrm{.}9$ pounds on the spot market. Did the U$.$S$.$ firm gain or lose and how much

did the U$.$S$.$ firm gain or lose by using the forward contract $($relative to not hedging and

relying on the spot market$)?$