The existing spot rate of the Singapore dollar is SGD/USD = 0.752. The 3-month forward rate of the Singapore dollar is SGD USD = 0.754. The probability distribution of the future spot rate in 3 months is forecasted as follows: Future Spot Rate SGD/USD Probability 0.736 20% 0.751 50 0.768 30 The money market interest rates are quoted in Annual Percentage Rate as below: U.S. Singapore Deposit rate: 0.82% 1.30% Borrowing rate: 3.25 5.25 A 3-month put option on Singapore dollars is available, with an exercise price of SGD USD = 0.752 and a premium of $.03 per unit. A 3-month call option on Singapore dollars is available with an exercise price of SGD USD = 0.762 and a premium of $.01 per unit. 1. Assume that ABC Co. will need to pay 2 million Singapore dollars in 3 months. Given the above relevant information, determine whether a forward hedge, money market hedge or a currency options hedge would be most appropriate. Then compare the most appropriate hedge to an unhedged strategy and decide whether ABC Co. should hedge its receivables position. Please provide a detailed explanation of your answers. 2. Assume that XYZ Inc. expects to receive 5 million Singapore dollars in 3 months. Given the above relevant information, determine whether a forward hedge, a money market hedge or a currency options hedge would be most appropriate. Then, compare the most appropriate hedge to an unhedged strategy, and decide whether XYZ Inc. should hedge its payables position. Please provide a detailed explanation of your answers. The existing spot rate of the Singapore dollar is SGD/USD = 0.752. The 3-month forward rate of the Singapore dollar is SGD USD = 0.754. The probability distribution of the future spot rate in 3 months is forecasted as follows: Future Spot Rate SGD/USD Probability 0.736 20% 0.751 50 0.768 30 The money market interest rates are quoted in Annual Percentage Rate as below: U.S. Singapore Deposit rate: 0.82% 1.30% Borrowing rate: 3.25 5.25 A 3-month put option on Singapore dollars is available, with an exercise price of SGD USD = 0.752 and a premium of $.03 per unit. A 3-month call option on Singapore dollars is available with an exercise price of SGD USD = 0.762 and a premium of $.01 per unit. 1. Assume that ABC Co. will need to pay 2 million Singapore dollars in 3 months. Given the above relevant information, determine whether a forward hedge, money market hedge or a currency options hedge would be most appropriate. Then compare the most appropriate hedge to an unhedged strategy and decide whether ABC Co. should hedge its receivables position. Please provide a detailed explanation of your answers. 2. Assume that XYZ Inc. expects to receive 5 million Singapore dollars in 3 months. Given the above relevant information, determine whether a forward hedge, a money market hedge or a currency options hedge would be most appropriate. Then, compare the most appropriate hedge to an unhedged strategy, and decide whether XYZ Inc. should hedge its payables position. Please provide a detailed explanation of your answers