(Answered) On january 1st al-araby group ordered raw material from

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On January 1^st, Al-Araby Group ordered raw material from Japan and agreed to pay 100 million yen for this order on April 1^st. It negotiated a 3-month forward contract to obtain 100 million Japanese yen on that date at $.009. On February 1^st, the Japanese firm informed Al-Araby that it won't be able to fulfill that order and it was cancelled. The Japanese yen spot rate on February 1^st is $.0087 and 2-month forward rate exhibits 3% discount. What should Al-Araby do to avoid foreign exchange risk? What is the profit or loss from this transaction in US dollars?

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