Your Firm Is a U A)Go Short 12 Six-Month Forward Contracts; Pay $1,630,000

Your firm is a U.S.-based exporter of bicycles.You have sold an order to a French firm for €1,000,000 worth of bicycles.Payment from the French firm (in euro) is due in three months.Detail a strategy using futures contracts that will hedge your exchange rate risk.Have an estimate of how many contracts of what type and how much (in $) your firm will have. $\begin{array}{|c|c|c|r|r|}\hline \text { Country } & {\text { U.S.\$ equiv. }} && \text { Currency per U.S.\$ } \\\hline & \text { Tuesday } & \text { Monday } & \text { Tuesday } & \text { Monday } \\\hline \text { Britain(pound) } ? 62,500 & 1.6000 & 1.6100 & 0.625 & 0.6211 \\\hline \text { 1 Month Forward } & 1.6100 & 1.6300 & 0.3211 & 0.6173 \\\hline \text { 3 Months Forward } & 1.6300 & 1.6600 & 0.6173& 0.6024 \\\hline \text { 6 Months Forward } & 1.6600 & 1.7200 & 0.6024 & 0.5814 \\\hline \text { 12 Months Forward } & 1.7200 & 1.8000 & 0.5814 & 0.5556 \\\hline\end{array}$

A) Go short 12 six-month forward contracts; pay $1,630,000.
B) Go short 16 six-month forward contracts; pay $1,630,000.
C) Go long 16 six-month forward contracts; raise $1,660,000.
D) Go long 12 six-month forward contracts; receive $1,660,000.