How this could help embraer managing its risk

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Reference no: EM133330741

Assignment:

Embraer of Brazil is one of the two leading global manufacturers of regional jets (Bombardier of Canada is the other). Regional jets are smaller than the traditional civilian airliners produced by Airbus and Boeing, seating between 50 and 100 people on average. Embraer has concluded an agreement with a regional U.S. airline to produce and deliver four aircraft one year from now for $80 million. The current spot rate on the Brazilian real (R$) is R$3.39. A Brazilian bank is prepared to offer Embraer a forward contract at R$3.35. Compute and discuss how this could help Embraer managing its risk.

Reference no: EM133330741

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How this could help embraer managing its risk : A Brazilian bank is prepared to offer Embraer a forward contract at R$3.35. Compute and discuss how this could help Embraer managing its risk.

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