CASE 2: Ganado has 3,500,000 account payable in 90 days. Now, lets assume that Ganado has 3,500,000 account payable in 90 days. Total payment of 3,500,000 is due in 90 days. Use the below table information to answer the questions below.

Put options on the British pound:
Strike rate ($/)	$1.73
Put option premium (%)	1.50%
Call options on the British pound:
Strike rate ($/)	$1.73
Call option premium (%)	1.50%

a. How much in U.S. dollars will Ganado pay in 90 days with a forward market hedge?

b. How much in U.S. dollars will Ganado pay in 90 days with a money market hedge?

c. How much in U.S. dollars will Ganado pay in 90 days if Ganado covers the transaction exposure with the $1.7300/ call option and the pound appreciates above $1.7300/

d. The ____________ provides the lowest certain cost hedging method for payment settlement.

\begin{tabular}{lr} Assumption & \multicolumn{1}{c}{ Value } \\ \hline 90-day A/R in pounds & 3,500,000 \\ Spot rate ($/) & $1.7547 \\ 90-day forward rate ($/) & $1.7392 \\ 3-month U.S. dollar investment rate & 5.631% \\ 3-month U.S. dollar borrowing rate & 8.200% \\ 3-month U.K. investment interest rate & 9.453% \\ 3-month U.K. borrowing interest rate & 14.245% \\ Ganado's WACC & 11.452% \\ Expected spot rate in 90 days (\$/) & $1.7833 \\ Put options on the British pound: & \\ Strike rate (\$/) & $1.7300 \\ Put option premium & 1.5% \\ Strike rate (\$/) & $1.6800 \\ Put option premium & 1.0% \\ \hline \end{tabular}