A Brazilian firm owes you $2,000,000, payable in three months, however, they insist on paying in Brazilian Reals. The current spot exchange rate is $0.59305/Real. The three-month forward exchange rate is $0.61255/Real. How many Real should you demand in a forward contract to receive $2,000,000 in three months to hedge the exchange rate risk?
A) 1,186,100 Real
B) 3,372,397 Real
C) 3,265,040 Real
D) 1,225,100 Real
Correct Answer:
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