a) Use the following information to answer the question: XYZ Company has an account receivable of 10,000,000 from a British company to be paid in three months. The additional information is as follows: $2.0290 British pound 3-month forward rate: $2.0032 British pound spot rate: 3-month interest rate in the US: 3-month interest rate in the UK: 2% 3% What will be the approximate value of the account receivable in US dollars if the company makes a money-market hedge? (3 marks) b) For the last two years New Zealand dollar has depreciated by 30% against US dollar. By how much US dollar has appreciated against New Zealand dollar? c) (3 marks) The following graph displays the percent changes of countries exchange rates from December 31, 2019 to March 31 2020. Local currency appreciation against USD, percent 0 Appreciation Depreciation 10 -15 Argentina Turkey Japan Switzerland Saudi Arabia China Euro area India Korea UK Canada Australia Indonesia Mexico Russia -20 South Africa Brazil Countries with reserve currencies (or pegged to a reserve currency) Countries with significant net energy exports Other G20 nations -25 75 50 25 0 25 50 75 100 125 150 Foreign exchange reserves minus external debt, percent of GDP i. ii. iii. Based on your observation as the above, what are the main sources of currencies to fall against US dollar, (2 marks) The currencies of reserve-issuing countries have not risen moderately against the dollar? Explain the probable reasons. (3 marks) In reducing unwelcome exchange rate tensions, reserve-currency countries may consider coordinated intervention with affected countries. Do you think such intervention may happen? Why or why not? (4 marks)