Weese R. Grains of Canada has sold 5,000 tonnes of wheat to Pete's Apasta Company of Italy at 110 euros per tonne and payable in one year. The current spot rate is 1.3805 (C$/euro) and the 1-year forward is 1.3676. The financial analyst at Weese R. suggests that the spot rate in one year will be 1.3485. Interest rates in Canada are currently 3.40 percent for 1 year and 3. 77 percent in Italy.
a. Outline the various options available to Weese R. Grains to handle its foreign exchange exposure.
b. Make a recommendation.