You are given that the 180-day Australian interest rate is 1% and the 180-day Singapore interest rate is 2%. The 180-day forward rate of the Singapore dollar is A$1.10 and the spot rate of the Singapore dollar is A$1.08. Assume that a company from Australia will receive S$100,000 in 180 days.

(a) Calculate the estimated revenue for a forward hedge.(2 marks)

(b) Calculate the estimated revenue for a money market hedge.(6 marks)

(c) Would it be better to use a forward hedge or a money market hedge? Explain your answer.