A U.S. company has British pound 2 million payables in 90 days. The company decide to use option contracts to manage its FX risk from this international transaction and has the following information about the option contracts.

A 90 day call option contract for BP 2 million with strike rate = $1.74/BP, call premium per British pound is $0.02

A 90 day put option contract for BP 2 million with strike rate = $1.75/BP, put premium per British pound is $0.02

Based on the option the US company purchased, 90 days later if the spot rate becomes $1.7900/BP, what would be the company's decision for the option?

Group of answer choices

OTM; let the option expire

\ITM; let the option expire

ITM; exercise the option

OTM; exercise the option