Question $2$

A U$.$S$.$ firm sells merchandise today to a British company for $100,000.$ The current exchange rate is $$\frac{2\mathrm{.}03}{},$ the

account is payable in three months, and the firm chooses to avoid any heding techniques designed to reduce or eliminate

the risk of changes in the exchange rate. If the exchange rate changes to $$\frac{2\mathrm{.}05}{}$ the U$.$S$.$ firm will realize a

of

loss; $$2000$

gain; $$2000$

loss; $2000$

gain; $2000$