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A company just exported a plane to Spain and its payment of 10millions is due in 1 year. The information the company has from the

A company just exported a plane to Spain and its payment of 10millions is due in 1 year. The information the company has from the financial markets is the following:

Spot $/ (bid - ask)

1.3 1.5

1 year Forward $/ (bid -ask)

1.2 1.4

Spot / (bid - ask)

1.02 1.04

1 year Forward / (bid - ask)

1.25 1.30

1 year Interest Rate in $

2%

1 year interest rate in

4%

Knowing that there is no possibility to invest in (i.e. you can use only for swap), list and evaluate all the risk-hedging alternatives the company has in order to maximize its revenue in 1 year. Clearly describe all the steps. What would you choose to do?

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