Hedging Strategies - Suppose that Retrojo Inc. is a U.S. based MNC that will need to purchase F$2.00 million (Fijian dollars, F$) worth of imports from Fiji in 90 days. Currently, the spot rate for the Fijian dollar is $0.46 per F$.

1. If Retrojo were to exchange U.S. dollars for the required F$2,000,000.00 Fijian dollars, how much would Retrojo Inc. have to secure today in U.S. dollars?

2. If Retrojo waits 90 days to make this exchange (perhaps due to insufficient funds on hand), and the Fijian dollar appreciates to $0.59 during those 90-days, how much would Retrojo need?

3. What can Retrojo do to hedge his position against unexpected changes in the exchange rate?