Your Firm Is a U A)Go Short 12 Six-Month Forward Contracts; Pay £555,600

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. $\begin{array}{|c|c|c|r|r|}\hline \text { Country } & {\text { U.S.\$ equiv. }} && \text { Currency per U.S.\$ } \\\hline & \text { Tuesday } & \text { Monday } & \text { Tuesday } & \text { Monday } \\\hline \text { Britain(pound) } ? 62,500 & 1.8000 & 1.8100 & 0.5556 & 0.5525 \\\hline \text { 1 Month Forward } & 1.8100 & 1.8300 & 0.5525 & 0.5464 \\\hline \text { 3 Months Forward } & 1.8300 & 1.8600 & 0.5464 & 0.5376 \\\hline \text { 6 Months Forward } & 1.8600 & 1.8200 & 0.5376 & 0.5495 \\\hline \text { 12 Months Forward } & 1.8200 & 1.8000 & 0.5495 & 0.5556 \\\hline\end{array}$

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.