Using forward hedge or money market hedge

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Reference no: EM132000796

Assume the following information 180 day US interest rate = 8% 180 day British interest rate = 9% 180 day forward rate of British pound = 1.50 Spot rate of British pound = 1.48 Assume that Riverside Corp. from the United States will receive 400,000 pounds in 180 days. Would it be better off using forward hedge or a money market hedge? Substantiate your answer with estimated revenue for each type of hedge and show all work.

Reference no: EM132000796

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