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Tall Ltd.'s (Tall) year-end is on December 31. On November 1, 2022 when the US dollar was worth CDN$1.365, Tall sold merchandise to an American client for US$525,000. Full payment of this invoice was expected by March 1, 2023. On December 1, the spot rate was CDN$1.345, and the three-month forward rate was CDN$1.367. In order to minimize its foreign exchange risk and exposure, Tall entered into a forward contract with its bank on December 1, 2022 to deliver US$525,000 in three months' time. The spot rate at year-end was CDN$1.36 and the forward rate from December 31, 2022 to March 1, 2023 was CDN$1.34. On March 1, 2023, Tall received the US$525,000 from its client and settled its contract with the bank. The forward contract was to be accounted for as a fair value hedge of the US dollar receivable. Tall has not adopted hedge accounting. Significant dates and exchange rates pertaining to this transaction are as follows:

	Spot Rates	Forward Rates*
November 1, 2022 (Transaction date)	US$1 = CDN$1.365
December 1, 2022 (Hedge date)	US$1 = CDN$1.3450	US$1 = CDN$1.367
December 31, 2022 (Year-end)	CDN$1.36	CDN$1.34
March 1, 2023 (Settlement date)	US$1 = CDN$1.368.	US$1 = CDN$1.368.

*For contracts expiring on March 1, 2023.

What is the amount of Tall's foreign exchange gain or loss prior to its hedge?

Multiple Choice

• A CDN$10,500 gain.

• A CDN$1,050 gain.

• No gain or loss to report until settlement date.

• A CDN$10,500 loss.