If Michael (who lives in Los Angeles, CA) has a contractual obligation to pay Phoebe in the United Kingdom 5,000 pounds in 60 days, Michael could mitgate the foreign exchange rate risk and any loss due to the pound appreciation by:

Group of answer choices

Entering into a forward contract to purchase pounds for delivery in 60 days.

Entering into a forward contract to purchase dollars for delivery in 60 days.

Entering into a forward contract to sell dollars for delivery in 60 days.

Entering into a forward contract to sell pounds for delivery in 60 days.