Skylark Ltd will require BP 5,00,000 in next 60 days for a latest transaction. Which hedging techniques should Skylark Ltd use out of (i) Forward Market Hedge (ii) Money Market hedge (iii)Option hedge (iv) No hedge. The Spot rate of BP as of today is $1.50. The 60 days forward rate of BP as of today is $1.45. Interest rates in the two countries are given as follow:

	UK	US
60 days deposit rate	5.5%	5.5%
60 days borrowing rate	6.0%	6.0%

A call option on BP that expires in 60 days has an exercise price of $1.48 and a premium of $0.03/BP. A Put option on BP that expires in 60 days has an exercise price of $1.49 and a premium of $0.02/BP. Skylark Ltd forecasts the future spot rate in 60 days with the probabilities are as follow: $1.43 (20% probability), $1.46 (70% probability), $1.54 (10% probability).