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Forward versus Money Market Hedge on Receivables. Assume the following information: 180‑day U.S. interest rate =...

Forward versus Money Market Hedge on Receivables. Assume the following information:

180‑day U.S. interest rate = 0.07

180‑day British interest rate = 0.09

180‑day forward rate of British pound = $1.50

Spot rate of British pound = $1.41

Assume that Tax Corp. from the United States will receive 412,000 pounds in 180 days. How much more (or less) would the firm receive in 180 days if it uses a forward hedge instead of a money market hedge?

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