You are US company, 500,000 BP (British Pound) payable to UK in one year. Answer in terms of US$. Information for Forward Contract: Forward exchange rate (one yr): 1.54 $/BP 1 Information for Money Market Instruments (MMI): Current exchange rate: 1.50 $/BP Investment return at Aerion Fund Management (in UK): 4% annual ne Interest rate of borrowing from Bank of America (in USA): 2% annual Information you need for Currency Options Contract: rd Options premium: 0.015 $/BP ins interest rate of borrowing from Bank of America (USA): 2% annual Allowed to exercise options at 1.54 $/BP I Let's suppose you signed the Currency Options Contract. The actual exchange rate at the time of the payment is 1.60 $/BP. What would you do? Do not exercise the option and take the actual exchange rate of 1.60 $/BR. Exercise the option and take 1.54 S/BP