Slade plc is a medium-sized UK company with export and import trade links with US companies. The following transactions are due within the next six months. Transactions will be in the currency specified.

Required
Calculate the net sterling receipts which Slade might expect for both its three and six month transactions if it hedges foreign exchange risk on:
(a) The forward foreign exchange market;
(b) The money market.

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Purchase of components, cash payment due in 3 months: Sale of finished $116,000 $197,000 $447,000 goods, cash receipt due in 3 months: Purchase of finished goods for resale, h payment due in 6 month cas s: Sale of finished goods, Exchange rates quoted on London market Spot 3 months' forward 6 months' forward cash receipt due in 6 months: $154,000 $/E 1.4106-1.4140 0.82-0.77 1.39-1.34 Interest rates (annual) 3 months or 6 months Sterling Dollars Borrowing Lending 7.5% 60% 4.5% 3.0%