You are UK company, 400,000 US$ payable to US in one year. Answer in terms of BP (British Pound). Round at four decimal places Examples: 123487 ---> 1.2349; 1.23533 --> 1.2353 Information for Forward Contract: Forward exchange rate one yr): 0.7124 BP/$ Information for Money Market Instruments (MMI): Current exchange rate:0.7173 BP/$ Investment return at JP Morgan (in US): 5% annual Interest rate of borrowing from HSBC (UK): 4% annual Information you need for Currency Options Contract: Exercise options premium at 0.09 BP/$ Interest rate of borrowing from HSBC (UK): 3% annual Allowed to exercise options at 0.7215 BP/$ Let's assume you signed the COC contract in this scenario. If the actual exchange rate at the time of payment is 7011 BP/$, should you exercise the option? No Yes