Muller Industries is a U.S. multinational that just sold C$1.1 million of goods on account, due in 30 days to a Canadian customer. The spot exchange rate is $0.792/C$, while the 30-day forward rate is $0.813/C$. Muller is interested in hedging this account receivable by using a money market hedge. If the 30-day periodic investment rate in Canada is 0.20 percent, how many U.S. dollars does Muller need to borrow to properly hedge the account receivable?

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The Answer of Muller Industries is a U.S. multinational that just sold C$1.1 million of goods on account, due in 30 days to a Canadian customer. The spot exchange rate is $0.792/C$, while the 30-day forward rate is $0.813/C$. Muller is interested in hedging this account receivable by using a money market hedge. If the 30-day periodic investment rate in Canada is 0.20 percent, how many U.S. dollars does Muller need to borrow to properly hedge the account receivable?

Muller Industries Is a U