The exchange rate between the Ghana cedi (GHS) and the United States Dollar (USD) on Friday 18th May 2018 is 1 USD to 4.5175. The 6-month interest rate for GHS is 13.90% whilst that of USD is 3%. How should the 6-month rate between USD and GHS be quoted to avoid arbitrage? (2 marks) 

b) A company expects to pay USD 1m in 6month's time for goods it is importing from China and is looking to hedge its exchange rate risk. Is it prudent for the company to buy USD 6months forward? Explain your answer. (1 mark) 

c) The Treasurer of this company has heard that a new bank that has opened in Ghana offers Risk management products that can help him hedge its foreign exchange rate risk. He however lacks understanding and has contacted you for advice. Explain three derivative products he can use to hedge its foreign exchange rate risk.