Dollars on the forward market transaction

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IceyCold company enters into a contract on July 1 to sell snowcone supplies to Italy . The supplies will be delivered three months later (October 1) with full payment of 40,000,000 Euros due to IceyCold on the delivery date. On July 1 when the contract was signed, the three month forward exchange rate was equal to the spot exchange rate on that date. If IceyCold had entered into a forward contract using the July 1 exchange rate of 0.9354 euros/$1 dollar to hedge the 40,000,000 Euro conversion into U.S. Dollars, what would the gain or loss have been in U.S. Dollars on the forward market transaction?

Reference no: EM131582348

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