Question 2 Ramsey Limited has today received a 300,000 order from one of its German customers and it has granted a trade credit period of 3 months. You have ascertained the following current market information: Foreign Exchange Market Offer / spot Bid 1.1535 / 3 month forward 1.1545 55 premium 65 premium Money Market United Kingdom Eurozone Deposit Rate 1.0% 0.6% Borrowing Rate 1.2% 0.8% Required: (a) Using the above information, provide calculations and advise the company whether it should hedge its foreign exchange transaction risk by using a forward contract or a money market hedge. (8 marks) (b) Compare and contrast the use of currency forwards and currency futures as hedging instruments for foreign exchange transaction risk. (12 marks) (Total 20 marks)