Hambury Power and Light Company (HP\&L) has purchased an electric power generator from Mitsui Trading Company of Japan. HP\&L has to pay Mitsui 250 million in six months. The present spot rate is 250/S. The six-month forward rate is 248/S. HP\&L can borrow or invest yen at 8% and U.S. dollars at 10% (annual rates). HP \&L can also purchase a six-month put option on the Philadelphia Stock Exchange at a strike price of 250 for a premium of 0.003 cents per yen. Alternatively, HP\&L can purchase a six-month call option on the Philadelphia Stock Exchange at a strike price of 250 for a premium of 0.004 cents per yen. (a) Find the cost of hedging the transaction exposure using the forward market. (2 points) (b) Find the cost of hedging the transaction exposure using the money market. (3 points) (c) Find the cost of hedging the transaction exposure using the option market. (4 points)