I understand the level 3 curriculum teaches approximation. However, for this question, would I still get full credit if I use the actual forward rate?
Forward rate = 2*1.018/1.04 = 1.957692
Hedged return = 1.957692/2*1.075 - 1 = 5.23%
This way of solving the problem was not provided in the CFA guideline answer.