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You are the treasurer for ABC corporation. You just received a bill from your Italian supplier of Genoa salami for Eur 500,000. The Euros are

You are the treasurer for ABC corporation. You just received a bill from your Italian supplier of Genoa salami for Eur 500,000. The Euros are due in three months.

1- What is your underlying exposure? ( What are you long or short)

2- If the EURUSD 3 month forward exchange rate is $1.13/EUR today, What is the gain or loss tomorrow on the underlying position if the EURUSD 3 month forward rate rises to $1.14/EUR?

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