Nickel plains of Canada has purchased 500,000 pounds of nickel from coin Ltd. At US$6.96, payable in 90 days. The current spot rate is 1.3404 (C$/US$) and the 90 day forward is 1.3421. The vice-president of finance at Nickel Plains suggests that the spot rate in three months' time will be 1.3333. Interest rate in Canada are currently 2 percent for 90 days and 1.6 percent in the United States.

a.Outline the various options available to Nickel Plains to handle its foreign exchange exposure

b.Make a recommendation.