Fit$-$Right Shoe Company is a shoe distribution center. The company agrees to buy $1,000$ pairs of shoes from a factory in China. Fit$-$Right enters into a $30-$day

forward exchange transaction with the factory. What is the result of this type of agreement?

The exporter will have to float a loan to the importer for $30$ days at the current interest rate.

Fit$-$Right is taking a risk because the exchange rate in $30$ days may be higher than when the company placed the order.

Fit$-$Right will be guaranteed that they will have to pay no more than the $30-$day forward exchange rate, insuring a profit.

In $30$ days, the importer will have to pay for the shoes based on the exchange rate that was in effect on the day the deal was made.