Green has just sold equipment to Brown. Green is a US company who has USD accounting. Sale date is June 2020 and payment date December 2020. 

Deal amount €1 000 000Bonjour 

Spot June = $1.15/€

6-month forward contract = $1.14€

Spot December forecast = $1.16/€

Eurozone 6-month borrowing rate = 1.0%/year

Determine foreign exchange gains/(losses) if Green hedges with 

1. 100% with forwards 

2. 50% with forwards 

3. does not hedge 

4. money market hedge, how much should they borrow and in which currency? 

e. money market hedge, how much are the USD proceeds?