You are buying a put option to hedge yourself from exchange rate fluctuations. The option has a strike price of 0.90/$. You will receive 1,000,000 from a customer in 3-months from now. The future value of the premium is $3,200. If the spot rate in three months is 0.95/$ decide whether you exercise the put option and calculate your cash inflow.

A. $1,107,911

B. $1,114,311

C. $1,246,800

D. $1,253,000

8.5.5