Bull Run Company from Malaysia purchased USD2.5m worth of commodities on 15 May 2023 from Cambodia. The firm pays only \30 cash and the balance on credit is agreed to be paid exactly in 6 months from the date of purchase. The current, MYR/USD exchange rate is RM4.20 and you are uncertain about the future rates when making the debt settlement with Cambodia. Your finance manager's analysis is suggesting to enter into one of the following available futures contracts. Each contract size is USD 125,000 . On the due date, RM/USD Futures is trading at RM 4.45/USD1 while the spot is RM 4.50 i) Explain how Bull Run Company hedges its RM/USD exposure. ii) What will be the net cost for Bull Run in settling the outstanding in MYR
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