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On January 10 Volkswagen agrees to import auto parts worth $7 million from the US. The...

On January 10 Volkswagen agrees to import auto parts worth $7 million from the US. The parts will be delivered on March 4 and are payable immediately in dollars. VW decides to hedge its dollar position by entering into IMM futures contracts. The spot rate is $1.3447/ Euros and the March futures price is $1.3502/ Euros. On March 4, the spot turns out to be $1.3452/ Euros, while the March the futures price is $1.3468/ Euros. Calculate VW's net euro gain or loss on its futures position.

a. $13,850 loss

b. $13,850 gain

c. $17,850 loss

d. $17,850 gain

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