Styles 7. Under Armour is building a $10 million dollar (MYR 20 million) addition to its Kuala Lumpur factory in Malaysia. On May 1 it pays $9 million dollars (MYR 18 million) of the construction costs upfront, and will pay the $1 million dollar balance (MYR 2 million) upon completion one year from now. The payment to the Malaysian construction company is due in MYR a. If Under Armour left this MYR payable unhedged, would the management team prefer the MYR to depreciate or appreciate vs. the USD (as it solely relates to just this payable)? b. Under Armour has decided to hedge the FX risk of this payable by entering into a forward contract. First it needs to know what the USD-MYR 1-year forward rate is. The May 1 USD-MYR spot rate is 1 USD = 2 MYR. USD 1-year interest rate is 2% MYR 1-year interest rate is 4% If Interest Rate Parity holds, what is the May 19 USD MYR 1-year forward rate? c. Using the forward rate that you calculated above in 7b, write out the details of the forward contract that Under Armour will use to hedge their MYR payable due one year from now