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Jetta production cost in 2002 and 2003 was 14,000 Euro per Jetta. Jetta sold in US...

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Finance

Jetta production cost in 2002 and 2003 was 14,000 Euro perJetta. Jetta sold in US at $15,000 in 2002 and 2003. Forward hedgeexchange rate was 1 $/Euro in 2003. Rate without hedge (i.e. marketexchange rate) was 1.25$/Euro in 2003. If 12,000 Jetta were sold inUS, in 2003, by 60% forward hedge and 40% not hedged. What would beprofits or loss from sales of 12,000 Jetta in US?  

Loss of 2.4 million Euro.

Profit of 1.8 million Euro.

Loss of 2.8 million Euro

Profit of 1.2 million Euro.

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