Use the international 5 parities and explain why you choice the one being used by choice in order to solve the questions.

10) You are exporting goods to Germany and have agreed to a 30 day's credit before settlement. The amount is EUR 1.000 .000 . The interest rate is 3% in Sweden and 4% in Germany (Euro_area). The spot price is EUR/SEK 9.75. a) What is the expected payment in SEK? b) Construct a money-market hedge for the amount. c) Construct a forward market hedge for the amount. d) What is the actual outcome on the a-c questions if the actual spot rate on the day of settlement is 9.70 and 9.80 respectively? At the same time, you buy goods from France for EUR 500.000 with the same terms. e) Calculate your exposure to EUR f) Construct a money-market hedge for the exposed amount. g) Construct a forward market hedge for the exposed amount