Au. s. company, cary research, sold a super computer to the max planck institute in germany on credit and invoiced €10 million payable in six months. currently, the six-month forward exchange rate is $1.10/€ and the foreign exchange advisor for cray research predicts that the spot rate is likely to be $1.05/€ in six months.

(a) what is the expected gain/loss from the forward hedging?
(b) if you were the financial manager of cray research, would you recommend hedging this euro receivable? why or why not?
(c) suppose the foreign exchange advisor predicts that the future spot rate will be the same as the forward exchange rate quoted today. would you recommend hedging in this case? why or why not?
(d) suppose now that the future spot exchange rate is forecast to be $1.17/€. would you recommend hedging? why or why not?

The business cycle is the periodic but irregular up-and-down movement in economic activity, measured by fluctuations in real gross domestic product (gdp) and other macroeconomic variables. a business cycle is typically characterized by four phases—recession, recovery, growth, and decline—that repeat themselves over time. economists note, however, that complete business cycles vary in length. the duration of business cycles can be anywhere from about two to twelve years, with most cycles averaging six years in length. some business analysts use the business cycle model and terminology to study and explain fluctuations in business inventory and other individual elements of corporate operations. but the term "business cycle" is still primarily associated with larger (industry-wide, regional, national, or even international) business trends.