Money market hedge

I discuss the relative merits of each of the ways of hedging against exchange rate risk in my free lectures. However given that you are obviously quoting from a question you have found (given that you have typed '5 points', you surely already have the answer to your question in the same place that you found the question! :-)

I discuss in my free lectures. If you type out the part from your exam kit that you find complicated then I will explain.