1. How much will you receive in $ if you use the money market hedge? You must show all work to earn credit. No credit will be given without supporting work. (1 pt)

Borrow 4,587,155.96 for 1 year at 9% and convert to $

4,587,155.96 x 1.50 = $6,880,733.94

$6,880,733.94 at 6.10%

4,587,155.96 GBP x 1.09

$6,880,733.94 x 1.0610 = $7,300,458.72

2. Draw a graph for the money market hedge. (X axis is the spot rate in the future. Y axis is $ cash paid.) (0.5 pts)