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Cray Research sold a supercomputer to the Max Planck Institute in Germany on credit and invoiced 10.40 million payable in six months. Currently, the six-month

Cray Research sold a supercomputer to the Max Planck Institute in Germany on credit and invoiced 10.40 million payable in six months. Currently, the six-month forward exchange rate is $1.12/ and the foreign exchange adviser for Cray Research predicts that the spot rate is likely to be $1.07/ in six months.

a. What is the expected gain/loss from a forward hedge?

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