Daikon Co June 2015

Hi,

Part a, demonstrating the outcome of 3 hedging choices.

The question asks how the additional cost of borrowing can be reduced.

I went completely the wrong way with this and calculated the effective rate for each of the 3 hedging methods under the current rate and in the event of an increase of 0.8%.

The solution presents the actual net dollar cost of each method.

Have I robbed myself of 15mrks?