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Use the information for the following problem(s). risk arising from the purchase. To help the firm make a hedging decision you have gathered the following information. The spot exchange rate is $1.250 /euro . The six-month forward rate is $1.22 leuro CVT's cost of capital is 11% The Euro zone 6 - month borrowing rate is 9% (or 4.5% for 6 months) .The Euro zone 6 -month lending rate is 7% (or 3.5% for 6 months) The U.S. 6 - month borrowing rate is 8% (or 4% for 6 months) The U.S. 6 - month lending rate is 6% (or 3% for 6 months) December call options for euro 750,000 ; strike price $1.28, premium price is 1.5% CVT's forecast for 6 - month spot rates is $1.27 /euro . The budget rate, or the highest acceptable purchase price for this project, is $3,900,000 or $1.30/ euro Refer to Instruction 10.1. If CVT chooses NOT to hedge their euro payable, the amount they pay in six months will be: A. $3,500,000. B. $3,900,000. C. 3,000,000