Table 1: CALCULATION OF 3 MONTHS FORWARD RATES

Table 6: Britain export with money market hedge:

Compare the forward quotes and money market hedges with each other to determine the best exchange rate hedges for Britain by completing table 7 below.

TABLE 7: BRITAIN EXCHANGE RATE HEDGES COMPARED:

	Forward rate	Money market hedge locked in exchange rate
$/
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Which hedging technique should be applied?

Exchange rate Forward rate 3 months from now (provide answer with 5th decimal rounding in this column) 0.76558 /$ AUD$/$ 1.37897 PV of foreign currency to be borrowed Converted at spot to $ for investment $ amount with interest invested Exchange rate locked in with transaction Show answers in this row: 2,485,070.936 $3,230,815.873 $3,293,986.4 1.31759$/