Infinity Inc, a U.S. based company, will receive 1,000,000 in 180 days. Infinity also has payables due in 180 days of 1,200,000. Today's spot rate of the Pound is $1.25, and the 180-day forward rate is $1.28. The 180-day annualized interest rates are as follows:

Invest rate ($) = 5% Invest Rate () = 4%

Borrow Rate ($) = 6% Borrow Rate () = 5%

c. How would you create a forward market hedge? What would be the value? (Show all your work and be specific about the hedging steps)

d. How would you create a money market hedge? What is the value? (Show all your work and be specific about the hedging steps)