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Your US corporation has a CNY1,000,000 account payable due in 6 months. To hedge its currency risk your company enters into an NDF contract. The

Your US corporation has a CNY1,000,000 account payable due in 6 months. To hedge its currency risk your company enters into an NDF contract. The current spot rate is CNY6.75/$, the NDF contract rate is CNY6.60/$, and the spot rate 6 months from today is CNY6.50/$.

a.Does your company make a payment or receive $ when the NDF contract is settled?

b.How much is the payment or receipt?

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