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Boeing just signed a contract to sell a Boeing 737 aircraft to Air France. Air France will be billed 2012 million payabl in one year.

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Boeing just signed a contract to sell a Boeing 737 aircraft to Air France. Air France will be billed 2012 million payabl in one year. Th current spot exchange rate is $1.05/ and the one-year forward rate is $110/6. The annual interest rate is 6 percent in the United States and 5 percent in France. Boeing is concerned with the volatile exchange rate between the dollar and the euro and would like hedge exchange exposure a. It is considering two hedging altematives: sell the euro proceeds from the sale forward or borrow euros from Crdit Lyonnaise against the euro receivable. Which altemative would you recommend

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