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Company X enters into a forward contract to hedge against the foreign currency risk associated with a future purchase of equipment costing 100,000. The forward

  • Company X enters into a forward contract to hedge against the foreign currency risk associated with a future purchase of equipment costing €100,000. The forward contract specifies a forward rate of $1.10/€, and the spot rate at year-end is $1.05/€. Calculate the gain or loss on the forward contract.

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