Asked by Malvika Chatooah

Assume Sun Microsystems expect to receive €20,000,000 in 90 days. A dealer provides a quote of $0.875 for a currency forward contract to expire in 90 days.
Suppose that at the end of 90 days, the rate is $0.90.
REQUIRED
Assuming that the settlement is in cash, calculate the cash flow at expiration of Sun Microsystems enters into a forward contract expiring in 90 days to buy dollars at $0.875.

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