answer C and D only

WaFloro Co is a KABWE-based company which has the following expected transactions... One month: Expected receipt of $240,000 One month: Expected payment of $140,000 Three months: Expected receipts of $300,000 As the Corporate Finance Manager for WaFlo Co. you collect the following information: Spot rate ($ per K): 1.7820 + 0.0002 One month forward rate (s per K): 1.7829 +0.0003 4.6 5.4% 5.1 Three months forward rate ($ per k): 1.7846 +0.0004 Money market rates for WaFlo Co: Borrowing Deposit One year Kwacha interest rate: 4.9% One year dollar interest rate: Assume that it is now 1 April. Required: (a) Discuss the differences between transaction risk, translation risk and economic risk. (1.5 Marks) (b) Explain how inflation, Interest rates can be used to forecast exchange rates. (1.5Marks) (c) Calculate the expected Kwacha receipts in one month and in three months using the forward market. (3.5 Marks) (d) Calculate the expected Kwacha receipts in three months using a money-market hedge and recommend whether a forward market hedge or a money market hedge should be used. (3.5 Marks)