REQUIRED: $2\mathrm{.}1.$ Determine whether Aromatic $($Pty$)$ Ltd should select a forward contract or a money market hedge should it wish to minimise the cost of hedging. Advise Aromatic $($Pty$)$ Ltd accordingly.$$ Express the costs in Rands. $(9$ marks$)$ Communication skill: Logical argument$(1$ mark$)2\mathrm{.}2.$ Assume that instead of being in a net borrowing position, Aromatic $($Pty$)$ Ltd had sufficient cash balances on hand: $2\mathrm{.}2\mathrm{.}1.$ Explain how this will affect the related hedging transactions of Aromatic $($Pty$)$ Ltd$.(2$ marks$)2\mathrm{.}2\mathrm{.}2.$ Show with calculations of how this will affect the related hedging transactions of Aromatic $($Pty$)$ Ltd$.(3$ marks$)2\mathrm{.}3.$ Assume that Aromatic $($Pty$)$ Ltd$$s South African loan is subject to an interest of $390$ basis points above the Johannesburg Interbank Average Rate $($JIBAR$).$ Three $(3)$ prominent financial risks can be identified in Aromatic $($Pty$)$ Ltd$$s business. $$ Identify these three financial risks; $$ Explain the relevant financial risk in Aromatic $($Pty$)$ Ltd$$s context; and $$ Identify and explain two $(2)$ possible methods to manage each of the relevant financial risks. You may not make use of money market hedging or forward contracts. Structure your answer in the following format: $$ Identification of the financial risk Explanation of the financial risk Methods to manage the financial risk $$ Identification $3$ marks Explanation $6$ marks Methods to manage risk$11$ marks Communication skill: Clarity of expression $1$ Mark $(21$ marks$)$