American Airlines hedges a 2.5 million receivable by selling pounds forward. If the spot rate is $1.742/ and the 90-day forward rate is $1.7158/, what is American's actual true cost of hedging if the spot rate at the end of 90-days is $1.73/?

a)$142,000

b)$35,500

c)$8,875

d)$33,176

Suppose Pepsico hedges a 1 billion dividend it expects to receive from its Japanese subsidiary in 90 days with a forward contract. The current spot rate is 150/$1 and the 90-day forward rate is 149/$1. If the spot rate in 90 days is 154/$, how much has this forward market hedge cost Pepsico?

a)Pepsi gains $173,160 from the forward contract

b)Pepsi gains $217,903 from the forward contract

c)Pepsi loses $173,160 from the forward contract

d)Pepsi loses $217,903 from the forward contract