Your firm is a U.K.-based exporter of British bicycles.You have sold an order to an American firm for $1,000,000 worth of bicycles.Payment from the American firm (in U.S.dollars) is due in six months.Detail a strategy using futures contracts that will hedge your exchange rate risk. 
A) Go short 12 six-month forward contracts; pay £555,600.
B) Go short 16 six-month forward contracts.Pay approximately £537,600.
C) Go long 12 six-month forward contracts.Receive approximately £549,500.
D) Go long 16 six-month forward contracts; raise approximately £537,600.
Correct Answer:
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