On November 1, 2001 Zamfir Company, a U.S. corporation, purchased minerals from a Russian company for 2,000,000 rubles, payable in 3 months. The relevant exchange rates between the U.S. and Russian currencies are given: 
The company's incremental borrowing rate provides a discount rate of 0.975 for three months.
Assume that on November 1, 2001 Zamfir Company enters a forward contract to buy 2,000,000 rubles on February 1, 2002. What is the fair value of the forward contract on December 31, 2001?
Definitions:
Power of Acceptance
In contract law, the authority to accept an offer and create a binding legal agreement by expressing agreement to its terms.
Undue Excitement
Excessive enthusiasm or agitation that surpasses usual levels or expectations.
Effective Offer
A proposal made by one party to another intending to create a legal obligation upon acceptance.
Reasonably Definite Terms
A requirement in contract law that the terms of a contract must be clear enough for both parties to be able to understand their obligations and enforce the agreement.
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