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On January 15, Marriot Co. (a U.S. firm) purchases a futures contract specifying MXP200,000 with the March settlement date to hedge its exchange rate risk

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On January 15, Marriot Co. (a U.S. firm) purchases a futures contract specifying MXP200,000 with the March settlement date to hedge its exchange rate risk of MXP200,000 when it orders supplies from a Mexico supplier in March. This futures contract is priced at $0.38/MXP. On February 1st, Marriot realizes that it has no need for MXP200,000 in March since it will not need to order supplies. Marriot thus sells a futures contract specifying MXP200,000 with the March settlement date to offset the contract purchased in January. This futures contract is priced at $0.41/MXP. What is the result of these transactions to Marriot Co.? Marriot Co. makes a profit of MXP6,000. Marriot Co. incurs a loss of $6,000. It cannot be determined. Marriot Co. makes a profit of $6,000. Marriot Co. incurs a loss of MXP6,000

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