Assume the following information:

Australian interest rate = 8% p.a. for 2 years

British interest rate = 9% p.a. for 2 years

2-year forward rate = 1.5 AUD/GBP

Spot rate = 1.48 AUD/GBP

Assume that borrowing and lending rate are the same. An Australian company will receive 400,000 in 2 years. How can it hedge by actual FX forward? Calculate the CF receipt in AUD under actual forward hedge.

How can it hedge by synthetic FX forward? Calculate the CF receipt in AUD under money market hedge.