U.S.borrowing Rate for 1 Year = 9.5

question 11

Multiple Choice

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
-What value can Alcoa lock in for its FF 3 million receivable if it executes a forward contract today?

• A)$518,700
• B)$524,100
• C)$528,900
• D)$532,410