3) Boeing just signed a contract to sell a Boeing 737 aircraft to Air France. Air France will be billed 25 million which is payable in one year. The current EUR/USD rate is 1.0699 and the one-year forward rate is 1.0835. The annual interest rate is 4.3% in the U.S. and 1.7% 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 borrowing euros from Credit Lyonnaise against the euro receivable. How much will they receive in one year? (USD, no cents)

4) You plan to visit Geneva, Switzerland in three months to attend an international business conference. You expect to incur the total cost of CHF 11,000 for lodging, meals and transportation during your stay. As of today, the CHF/USD rate is 1.1017 and the three-month forward rate is 1.1125. You can buy the three-month call option on CHF with the exercise rate of 1.1000 for the premium of $0.024 per SF. Assume that your expected future spot exchange rate is the same as the forward rate. The three-month interest rate is 4.7 percent per annum in the United States and 1.9 percent per annum in Switzerland. Calculate your expected dollar cost if you choose to hedge via call option on SF. (USD, no cents)

5) Consider a U.S.-based company that exports goods to Switzerland. The U.S. Company expects to receive payment on a shipment of goods in three months. Because the payment will be in Swiss francs, the U.S. Company wants to hedge against a decline in the value of the Swiss franc over the next three months. The U.S. risk-free rate is 1.6 percent, and the Swiss risk-free rate is 0.7 percent. Assume that interest rates are expected to remain fixed over the near future. The current USD/CHF rate is 1.1089. Calculate the price at which the U.S. Company could enter into a forward USD/CHF contract that expires in 90 days (X.XXXX)

6) Suppose that you are a U.S.-based importer of goods from the United Kingdom. You expect the value of the pound to increase against the U.S. dollar over the next 30 days. You will be making payment on a shipment of imported goods in 30 days and want to hedge your currency exposure. The U.S. risk-free rate is 3.3 percent, and the U.K. risk-free rate is 1.2 percent. These rates are expected to remain unchanged over the next month. The current spot rate is $1.3092. Calculate the no-arbitrage price at which you could enter into a forward contract that expires in 30 days. (X.XXXX)