Boeing just signed a contract to sell a Boeing $737$ aircraft to Air France. Air France will be billed $50$ million which is payable in one year. The current spot exchange rate is $$\frac{1\mathrm{.}1}{}$ and the one$-$year forward rate is $$\frac{1\mathrm{.}20}{}.$ The annual interest rate is $5\mathrm{.}0\%$ in the U$.$S$.$ and $2\mathrm{.}0\%$ in France. Boeing is concerned with the volatile exchange rate between the dollar and the euro and would like to hedge exchange exposure.

If Boeing is considering two hedging alternatives: forward market hedging versus money market hedging. Which alternative would you recommend?

$$ forward market hedging.

money market hedging.

indifferent between the two alternatives

Insufficient information to make a recommendation.