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How much will receive in one year

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Problem 1: Boeing just signed a contract to sell a Boeing 7373 aircraft to Air France. Air France will be billed 17 million which is payable in one year. The current EUR/USD rate is 1.0610 and the one-year forward rate is 1.0878. The annual interest rate is 3.8% in the U.S. and 2.7% in France. Boeing is concerned with the volatile exchange rate between the dollar and the euro and would like to hedge exchange exposure. It is considering to hedge selling the euro proceeds from the sale forward. How much will they receive in one year?

Reference no: EM132936512

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