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  3. suppose that retrojo inc. is a u.s. based mnc that

Suppose that Retrojo Inc. is a U.S. based MNC that will need to purchase F...

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Accounting

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Suppose that Retrojo Inc. is a U.S. based MNC that will need to purchase F $1.20 million (Fijian dollars, F\$) worth of imports from Fiji in 90 days. Currently, the spot rate for the Fijian dollar is $0.72 per F$. If Retrojo were to exchange U.S. dollars for the required F $1,200,000.00 Fijian dollars, it would need (U.S. dollars). If Retrojo waits 90 days to make this exchange (perhaps due to insufficient funds on hand), and the Fijian dollar appreciates to $0.82 during those 90 days, then Retrojo would need (U.S. dollars). Thus, if Retrojo believes that the Fijian dollar will appreciate, it can its exposure to such exchange rate risk by locking in the original exchange rate through the use of a forward contract. 7:E:0/2 (to complete this step and unlock the next step)

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