1. A U.S. firm buys merchandise today from a Japanese company for 100,000,000. The current exchange rate is 110.58/$, the account is receivable in three months, and the firm chooses to avoid any hedging techniques designed to reduce or eliminate the risk of changes in the exchange rate. If the exchange rate changes to 110.13/$, the U.S. firm will realize a ________ of ________.

   		translation gain; 3,695
   		translation loss; 3,695
   		transaction gain; $3,695
   		transaction loss; $3,695
   		None of the above is correct