Advise healthy grains which alternative they should take

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Reference no: EM133168850

Question - Healthy Grains has sold 4,000 tonnes of wheat to Muller Company in Germany at 130 euros per tonne, payable in one year.  The current spot rate is 1.675(C$/euro) and the 1-year forward is 1.595. Analysts in the international financial market suggest that the spot rate in one year will be 1.556. Interest rates in Canada are currently 3.55% for one year and 3.8% in Germany.

Required -

a) Outline with calculations three alternative actions available to Healthy Grains to handle its foreign exchange exposure.

b) Advise Healthy Grains which alternative they should take, providing the reason for your recommendation.

Reference no: EM133168850

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