Question: Please show simple steps to solve. 3 Boeing just signed a contract to sell a Boeing 737 aircraft to Air France. Air France will be

Please show simple steps to solve.

Please show simple steps to solve. 3 Boeing just signed a contract

3 Boeing just signed a contract to sell a Boeing 737 aircraft to Air France. Air France will be billed 20.04 million payable in one year. The current spot exchange rate is $1.05/ and the one-year forward rate is $1.10/. The annual interest rate is 6 percent in the United States and 5 percent in France. Boeing is concerned with the volatile exchange rate between the dollar and the euro and would like to hedge exchange exposure. 7.69 points a. It is considering two hedging alternatives: sell the euro proceeds from the sale forward or borrow euros from Crdit Lyonnaise against the euro receivable. Which alternative would you recommend? eBook Forward hedge Money market hedge Recommend alternative Print Forward hedge

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