How many units of this contract should the firm buy-sell

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HoleSale Inc, USA exports manhole covers to Japan and Germany. Over the next six month, the company anticipates sales of 14,880 units to Japan and 961 units to Germany. The price of manhole covers is set at JPY 1,199 and EUR 166 in Japan and Germany respectively. The following information is given: - The standard deviation of the JPY/USD exchange rate is 5 - The standard deviation of the EUR/USD exchange rate is 0.09 - The correlation of the JPY/USD and EUR/USD exchange rate is 0 - The standard deviation of the EUR/USD six-month forward rate is 0.09 HoleSale Inc. is going to use the EUR/USD forward market to hedge all currency risk across countries to which it sells its product by booking a single forward contract that minimises the company's risk. How many units of this contract should the firm buy/sell? Round your answer to zero decimal place. 

Reference no: EM131182946

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