Cray Research sold a supercomputer to the Max Planck Institute in Germany on credit and invoiced 4 million payable in six

months. Currently, the six-month forward exchange rate is $1.09/ and the foreign exchange advisor for Cray Research predicts

that the spot rate is likely to be $1.05/ in six months.

What is the expected gain/loss from the forward hedging?

O $160,000 loss

O $139.799 gain

O $139.799 loss

O $160,000 gain