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Your small multinational US business has a 60,000 Euro capital expense to purchase some tools...

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Finance

Your small multinational US business has a 60,000 Euro capital expense to purchase some tools made in Germany in 6 months. The 6 month EUR forward rate is 1.15. You are thinking of hedging 100% of the exposure using a forward contract. If the actual exchange rate in 6 months is 1.00, then what would be the US dollar gain or loss on your hedged exposure (step 3)?

$9,000 gain

($9,000) loss

$0 gain or loss

(7,500) loss

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