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Assume Alcoa has access to the following quotes: U.S. borrowing rate for 1 year = 9.5%...

Assume Alcoa has access to the following quotes:

U.S. borrowing rate for 1 year = 9.5%

U.S. deposit rate for 1 year = 8.7%

French borrowing rate for 1 year = 11.3%

French deposit rate for 1 year = 10.2%

euro spot quote = $1.2363?78

euro 1 year forward quote = $1.2329?47

What value can Alcoa lock in for a receivable of euro3 million due in one year if it executes a money market hedge today?

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jeff jeffy answered 2 years ago
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