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McCain Food Ltd. expects to receive ¥ 0.5 billion on December 20, 2020, from a Japanese...

McCain Food Ltd. expects to receive ¥ 0.5 billion on December 20, 2020, from a Japanese importer of its products. Today is September 20, 2020 and the spot price between C$ and ¥ is C$0.01192 = ¥1.0. The 3- month futures exchange rate is C$0.014 per one yen. One futures contract is of the size ¥ 12.5 million.

Show how McCain Food can hedge the receipt of the ¥0.5 billion against the exchange rate risk by using the futures market.

Secondly, show McCain Foods profit(loss) from hedging its position fully, assuming that exchange rate on December 20, 2020 is expected to be $0.012 per ¥.

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