A U.S. firm sells merchandise today to a British company for 100,000. The current exchange rate is $2.03/. The account is payable in three months. The firm chooses to avoid any hedging techniques designed to reduce or eliminate the risk of changes in the exchange rate and plans to buy Pound on the payment day in three months from now. If the exchange rate changes to $2.02/ in three months from now the U.S. firm will realize a ________ of ________, compared to today's exchange rate

Loss; $1000

Gain; $1000

Loss; 1000

gain; 1000

8.5.5