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Papa Co is a KABWE-based company which has the following expected transactions. As the Corporate Finance Manager for Papa CO. you collect the following information:

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Papa Co is a KABWE-based company which has the following expected transactions. As the Corporate Finance Manager for Papa CO. you collect the following information: Required: a. Discuss the differences between transaction risk, translation risk and economic risk. (1.5 Marks) b. Explain how inflation, Interest rates can be used to forecast exchange rates. (1.5Marks) c. Calculate the expected Kwacha receipts in one month and in three months using the forward market. (3.5 Marks) d. Calculate the expected K wacha receipts in three months using a money-market hedge and recommend whether a forward market hedge or a money market hedge should be used. (3.5 Marks)

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