A US company is due to make a payment of $1\mathrm{.}0$m Euros in $6$ months. They

plan to hedge this payment by taking a long position in a forward contract

for $1\mathrm{.}0$m Euros with maturity $6$ months, at a forward exchange rate $1\mathrm{.}150.$

The current EUR$/$USD rate is X$0=1\mathrm{.}100,$ and the actual exchange rate

realized at maturity is X$(6$M $)=1\mathrm{.}075.$

i$)$ What is the gain or loss of the company at maturity?

ii$)$ What is the interest rate differential rU SD $$ rEU R for maturity $6$M

implied by the quoted forward FX rate?

$5$