A California wine company is committed to selling 3,400,000 of inventory in December 2020 to a customer based in Amsterdam. The US Company wants to protect itself against a decline in profit that would result from foreign exchange. The current futures price is $1.1220, how would it hedge?

Sketch out the cash flows of the hedged position (in US$) assuming the following scenarios. A. St = F0 B. St = F0 - $0.12 C. St = F0 + $0.12