J.C. Kim (JCK) Inc. (a major Cincinnati-area exporter of canned chili) expects to receive a payment of EUR 25,000 one year from now. Which of the following statements is true?

S1: JCK Inc. has a natural short position to the EUR. This would lead to a positive FX transaction exposure.

S2: To fully hedge its FX transaction exposure, JCK Inc. needs a long forward EUR 25,000 contract.

Group of answer choices

S1 is correct and S2 is false

Both statements are false

Both statements are correct

S2 is correct but S1 is false