Weese R. Grains of Canada has sold 5,000 tonnes of wheat to Petes Apasta Company of Italy at 110 euros per tonne and payable in one year. The current spot rate is 1.3805 (C$/euro) and the 1-year forward is 1.3676. The financial analyst at Weese R. suggests that the spot rate in one year will be 1.3485. Interest rates in Canada are currently 3.40 percent for 1 year and 3.77 percent in Italy.

a-1. Calculate the receipts if Weese R. Grains takes a chance on the spot rate.

Receipts $

a-2. Calculate the receipts if Weese R. Grains books a forward contract.

Receipts $

a-3. Calculate the receipts if Weese R. Grains buys a money market hedge. (Round intermediate calculations and the final answer to the nearest whole pound.)

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