Carrycan plc must make a payment of $364,897 in six months' time. It is currently 1 January. The company plans to hedge its transaction exposure and has collected the following information.

Foreign currency option prices (cents per £ for contract size £12,500):
Exercise price......................Call option (June)......................Put option (June)
$1.70..........................................3.7.............................................9.6
By making appropriate calculations, decide which of the following hedges is most attractive to Carrycan plc:
(a) Forward market (i.e. a forward exchange contract);
(b) Cash market (i.e. a money market hedge);
(c) Currency options.

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Exchange rates: S/E spot rate Six-month $/E forward rate 1.5617-1.5773 1.5455-1.5609 Money market rates: US dollars Sterling Borrow 6% 7% Deposit 4.5% 5.5%