90-day U.S. interest rate 90-day Hong Kong interest rate 90-day forward rate of Hong Kong dollar (HK) $0.115 Spot rate of Hong Kong dollar Expected spot rate of Hong Kong dollar in 90 days $0.127 3.5% 5% $0.124 Assume that Santa Monica Corporation in the U.S. will need 700.00o Hong Kong dollars in go days to cover a payable. What is the cost of implementing a money market hedge (assume that Santa Monica does not have any excess funds available and must therefore borrow)? 90-day U.S. interest rate 90-day Hong Kong interest rate 90-day forward rate of Hong Kong dollar (HK$) Spot rate of Hong Kong dollar Expected spot rate of Hong Kong dollar in 90 days 3.5% 596 $0.115 $0.124 $0.127 Assume that Santa Monica Corporation in the U.S. will need 700,000 Hong Kong dollars in go days to cover a payable. What is the cost of implementing a money market hedge (assume that Santa MMonica does not have any excess funds available and must therefore borrow)