Suppose that the exchange rate is 1.25 = 1.00.Options (calls and puts) are available on the London exchange in units of 10,000 with strike prices of 0.80 = 1.00.Options (calls and puts) are available on the Frankfurt exchange in units of 10,000 with strike prices of 1.25 = 1.00. For an Italian firm to hedge a 100,000 payable,

A. buy 10 call options on the pound with a strike in euro.

B.buy 8 put options on the euro with a strike in pounds.

C. buying 10 call options on the pound with a strike in euro or buying 8 put options on the euro with a strike in pounds will both work.

D. none of the options