Mattel Toys. Mattel is a U$.$S$.-$based company whose sales are roughly two$-$thirds in dollars $($Asia and the Americas$)$ and one$-$third in euros $($Europe$).$ In September, Mattel delivers a

large shipment of toys $($primarily Barbies and Hot Wheels$)$ to a major distributor in Antwerp. The receivable, $36$ million, is due in $90$ days, standard terms for the toy industry in

Europe. Mattel's treasury team has collected the following currency and market quotes in the popup window: $.$ The company's foreign exchange advisors believe the euro will be

at about $$\frac{1\mathrm{.}4207}{}$ in $90$ days. Mattel's management does not use currency options in currency risk management activities. Assume a $360-$day financial year.

a$.$ How much in U$.$S$.$ dollars will Mattel receive in $90$ days without a hedge if the expected spot rate in $90$ days is the same as the current spot rate of $$\frac{1\mathrm{.}4159}{}?$ The Credit Suisse

forward rate of $$\frac{1\mathrm{.}4181}{}?$ The Barclays forward rate of $$\frac{1\mathrm{.}4184}{}?$ The expected spot rate of $$\frac{1\mathrm{.}4207}{}?$

b$.$ How much in U$.$S$.$ dollars will Mattel receive in $90$ days if the accounts receivable is covered by the Credit Suisse $90-$day forward contract? The Barclays $90-$day forward contract?

c$.$ How much in U$.$S$.$ dollars will Mattel receive in $90$ days with a money market hedge?

d$.$ Advise Mattel on which hedging alternative is probably preferable.

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