Using a Forward Contract to Lock In an Exchange Rate In December 2002, banks were offering one-year currency forward contracts with a forward exchange rate of $0.987/€. Suppose that at that time,...

Using a Forward Contract to Lock In an Exchange Rate

In December 2002, banks were offering one-year currency forward contracts with a forward exchange rate of $0.987/€. Suppose that at that time, Manzini placed the order with Campagnolo with a price of 500,000 euros and simultaneously entered into a forward contract to purchase 500,000 euros at a forward exchange rate of $0.987/€ in December 2003. What payment would Manzini be required to make in December 2003?