You have been recently hired as a financial analyst by TheVerve Co., a Canadian firm dedicated to technological consulting. Recently, TheVerve has decided to invest 100 M AUD into its music streaming business in Australia by the end of 2020. They expect to get revenues for the next 4 years, with 4% return.

Richard Ashcroft, TheVerve's CEO asked you to explore if it is recommendable to take hedge using CAD/AUD forwards or wait and buy the required AUD in the spot market at the end of the year.

To decide in which market operate every year, two consulting companies where hired, FXConsulting and ForeX Forecasting. The recommendations that they have provided to their clients are resumed in theExhibit A.

Using the presented information. You must decide which of the recommendations to follow. For this: a) Calculate for each forecasting company the P&L for the full sample of forecasts, and the average annual P&L. b) Indicate which advice will you follow c) Calculate the IRP forward rate if the spot rate is 0.98 CAD/AUD