Your firm bought goods from a U.S. firm for US$50,000 on 1 June 20X1, and the spot rate is US$1 = S$1.34. The settlement date is 1 July 20X1. In order to hedge against this foreign currency, your firm entered into a forward contract to _____ US$50,000 at a forward rate of US$1 = S$1.35. The spot rate on 1 July 20X1 is US$1 = S$1.36. The firm's cost of hedging is ___________ .

Question 6 options:

1)	sell, $1,00

2)	sell, $500

3)	buy, $1,000

4)

buy, $500