Your firm is a U.S.-based exporter of bicycles. You have sold an order to a French firm for €1,000,000 worth of bicycles. Payment from the French firm (in euro) is due in three months. Detail a strategy using futures contracts that will hedge your exchange rate risk. Have an estimate of how many contracts of what type and how much (in $) your firm will have. 
A) Go short 12 six-month forward contracts; pay $1,290,000.
B) Go short 16 six-month forward contracts. Pay $1,230,000.
C) Go long 16 six-month forward contracts; raise $1,230,000.
D) Go long 12 six-month forward contracts. Receive $1,230,000.
Correct Answer:
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