Assume the following information:

90-day U.S. interest rate 4%

90-day Malaysian interest rate 3%

90-day forward rate of Malaysian ringgit $.400

Spot rate of Malaysian ringgit $.404

Assume that the Santa Barbara Co. in the United States will need 300,000 ringgit in 90 days. It wishes to hedge this payables position. Would it be better-off using a forward hedge or a money market hedge? Substantiate your answer with estimated costs for each type of hedge.Explain every situtaion