This is an international finance topic.

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8. A Uruguayan based exporter is owed CAD 12,530,000 by its Canadian customer (CAD-Canadian Dollar) in one year. The spot rate S(UYUCAD) is 22.4551 (UYU = Uruguayan Peso); the interest rate in the Uruguay is i.-9.25% and the interest rate in Canada is i,-1.25%. These rates are expected to remain constant for a few years. Show how the Uruguayan exporter can hedge its exposure with a money market hedge. Assume that the Uruguayan exporter has to borrow in t-0 to execute the money market hedge. What is the value of the receivable in UYU at maturity after the money market hedge? A. UYU 302,101,646.46 B. UYU 348,386,399.41 C. UYU 303,593,506.45 D. UYU 322,875,267.18 E. UYU 299,232,227.02