On December 1, 2018, Keenan Company, a U.S. firm, sold merchandise to Velez Company of Canada for 150,000 Canadian dollars (CAD). Collection of the receivable is due on February 1, 2019. Keenan purchased a foreign currency put option with a strike price of $.97 (U.S.) on December 1, 2018. This foreign currency option is designated as a cash flow hedge. Relevant exchange rates follow:

Date	Spot Rate		Option Premium
December 1, 2018	$	0.97	$	0.05
December 31, 2018	$	0.95	$	0.04
February 1, 2019	$	0.94	$	0.03 Compute the fair value of the foreign currency option at December 31, 2018. 27) A) $7,500. B) $6,000. C) $3,000. D) $1,500. E) $4,500. Please show a step by step guide, i want to learn how to do it, not just the answer