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Assume the following information: 9% 180-day U.S. interest rate 180-day British interest rate 11% 180-day forward rate of British pound $1.50 Spot rate of British
Assume the following information: 9% 180-day U.S. interest rate 180-day British interest rate 11% 180-day forward rate of British pound $1.50 Spot rate of British pound $1.46 Assume that Riverside Corp. from the United States will receive 350,000 pounds in 180 days. Would it be better off using a forward hedge or a money market hedge? Substantiate your answer with estimated revenue for each type of hedge. Do not round intermediate calculations. Round your answers to the nearest dollar. In comparison, the firm will receive $ in 180 days using the forward hedge, or about $ 180 days using the money market hedge. Thus, it should use the money market. hedge
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