6. Consider a U.S. based company that imports goods from France. The U.S. company expects to pay 5 million in four-months. Because these payments will be in euros, the U.S. company wants to hedge against an increase in the value of the euro in four months. The current spot exchange rate is $1.25/and four-months forward rate is $1.35/. The annual interest rate for U.S. is 1.2% and 1.8% for France. Do a money market hedge. b) Solution