ABC Plc$,$ a Tanzania company, imports goods from UK and is invoiced for $216,500$ payable on the $15$th January. The company wishes to hedge using currency options at an exercise price of Tshs$\mathrm{.}1,750.$ Data is as follows:

The current spot rate Tshs$/1,7121,715$

Sterling options contract size $12,500$

Exercise price March contracts

Tshs$.$ calls $$ puts

$1,65090\mathrm{.}2540\mathrm{.}30$

$1,70080\mathrm{.}4590\mathrm{.}80$

$1,75062\mathrm{.}5095\mathrm{.}80$

Contracts prices are in cents$/.$

Required:

a$.$ Show the hedged position and compute its cost

b$.$ Illustrate the action the company will take on the $15$th January if the Tshs$/$ spot rate at that is Tshs$\mathrm{.}1,8421,845.$

c$.$ Calculate the net saving that the company makes as the result of the option hedge.