A call option on pounds that expires in 180 days has an exercise price of $1.48 and a premium of $0.03 per unit.

Another call option on British pound that expires in 180 days has an exercise price of $1.49 and a premium of $0.035 per unit.

A put option on pounds that expires in 180 days has an exercise price of $1.49 and a premium of $0.02 per unit.

Fresno Corp. forecasts the future spot rate in 180 days as follows:

Possible future spot rates

Probability

$1.43

20%

$1.46

20%

$1.52

30%

$1.55

30%

Required:

Estimate the expected dollar cost of paying for the payables under each alternative strategy and suggest the best strategy considering that Fresno Corp. is a risk-averse company.