Response to the following problem:
Montclair Co., a U.S. firm, plans to use a money market hedge to hedge its payment of 3 million Australian dollars for Australian goods in 1 year. The U.S. interest rate is 7 percent, while the Australian interest rate is 12 percent. The spot rate of the Australian dollar is $.85, while the 1-year forward rate is $.81.
Determine the amount of U.S. dollars needed in 1 year if a money market hedge is used.