Vivek owns a business in Ontario, but 90% of his business is exported to the United States. He has a contract with an American company to sell USD$500,000 worth of product. Delivery is in 60 days. Vivek knows the CAD is at $0.92 today, but is expected to drop to $0.89 in 60 days.

a) Why would Vivek quote his price in USD?

b) What are the risks of quoting in USD?

c) If Vivek had asked for payment in CAD, what could the American company do to save money? What is this called?