Case Study: Company X is a multinational corporation engaged in international trade. To manage its foreign exchange rate risk, it regularly participates in the foreign exchange (FX) derivatives market. You are required to answer the questions below which are related to their activities in the FX derivatives market. 4.1 INFORMATION: Company X plans to import goods from Europe at a cost of 100,000. The current spot exchange rate is 1 EUR =1.20 USD. REQUIRED: 4.1.1 Explain what a spot exchange rate is and why it is essential for Company X in its international trade operations 4.1.2 Calculate the amount in USD that Company X needs to pay for this transaction. 4.2 INFORMATION: Company X anticipates a payment of 150,000 in three months for imported goods. The current spot exchange rate is 1EUR=1.25USD, and the three-month forward rate is 1EUR=1.22USD. REQUIRED: 4.2.1 Explain what a forward exchange rate is, and why Company X might consider using a forward contract to manage its currency risk. 4.2.2 Calculate the difference in the amount of USD payable if Company X uses the forward contract compared to the spot rate