A U. S. company expects to pay its supplier 1 million British pounds in 3 months and is considering whether to hedge the resulting foreign exchange risk with a futures contract or a forward contract on British pounds with 3 months to the delivery date. The correlation between changes in the spot price of British pounds in terms of U. S. dollars and changes in the U. S. interest rate is 0.85. Taking into account the daily settlement process associated with the use of futures contracts, which of the following is the correct hedging strategy?

a. Sell a futures contract on British pounds b. Buy a futures contract on British pounds c. Sell a forward contract on British pounds d. Buy a forward contract on British pounds