on Januaury 10, Volkswagen agrees to import auto parts worth $7 million from the US. The Parts will be delivered on March 4 and are payable immediatley in dollars. VW decides to hedge its dollar position by entering into IMM futures contract. The spot rate is $0.8947/Euro and the March futures price is $0.9002/Euro

A) calc the number of futures contract that VW must buy to offset its dollar exchange risk on the parts contract.

1/0.9002= EURO 1.1109

0.9002/0.9002 = 7,776,050 EURO

PLEASE SHOW HOW YOU CALCULATE SIZE OF FUTURES CONTRACT