The Following Information Is to Be Used in Answering Questions

question 13

Multiple Choice

The following information is to be used in answering questions 36?38.
U.S. borrowing rate for 1 year = 9.5%
U.S. deposit rate for 1 year = 8.7%
French borrowing rate for 1 year = 11.3%
French deposit rate for 1 year = 10.2%
French franc spot quote = $0.1763?78
French franc 1?year forward quote = $0.1729?47
-value can Alcoa lock in for a receivable of FF 3 million due in one year if it executes a money market hedge today?

• A) $525,540
• B) $516,545
• C) $530,012
• D) $520,940