The firm wants to hedge this receivable position which way, Financial Management

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The firm wants to hedge this receivable position which way

Given the following information:

180 day U.S. interest rate = 8%

180 day Chinese interest rate = 9%

180 day forward rate of Chinese Yuan = $1.51

Spot rate of Chinese Yuan = $1.47

Huang Corp. from the United States will receive 400,000 Chinese Yuan in 180 days, and the firm wants to hedge this receivable position. Which way is better, a forward hedge or a money market hedge? Please justify your answer with estimated costs for each type of hedge.

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