In June 2022 a USA company delivered a large shipment of care products to a major distributor in London. The 150 million pounds (GBP) receivable is due in 120 days. The company treasury has received the following currency and market quotes. (Use 360 days convention)

They want to hedge their transaction exposure in the money market. What is the hedged pay-off value and its certainty in Money market after 120 days?

Current spot rate ($/) = $1.2666

Companys WACC ($) = 8.5%

120-day UK borrowing rate = 4.5%

120-day UK investing rate = 3.5%

120-day US borrowing rate = 5.5%

120-day US investing rate = 5%

Select one:

1. $192,452,073.43; Uncertain
2. $192,452,073.43; Certain
3. $187,220,167.39; Certain
4. $187,182,266.01; Certain
5. $187,220,167.39; Uncertain
6. $192,485,763.55; Certain