QUESTION TWO FMJ is a Zambian business with the following projected foreign currency cash flows; Expected to receive US$ 15,000 in 2 months time froma Congolese Customer. Expected to pay 10,000 now and another 8,000 in 60 days" time being payment for the vehicle being imported froma UK Car dealer company. K per US$1 K per 1 The exchange rates are as follows; Spot exchange rates 21.502 29.586 One month forward 22.005 30.405 Two-months forward exchanges 22.641 31.893 REQUIRED: a) Briefly explain the difference between a spot exchange rate and a forward exchange rate. [lmarks) b) Calculate the net kwacha amount receivable payable if FMJ entered into two-months forward contracts for the dollar receipt as well as the Sterling payment. [6marks) c) Briefly explain to FMJ directors how they can use home currency invoicing to manage currency risk as they trade across currency frontiers. [3 marks) d) Locally FMJ has 9% K100 bonds currently trading at K97.3 ex-int. The bonds are redeemable at par in6 years' time. Determine the yield to maturity (YTM). [10 marks) [Total 20 marks]