An American firm has just bought merchandise from a British firm for £50,000 on terms of 90-day payment.This firm has purchased a 3-month call option on 50,000 pounds at a strike price of $1.7 per pound and a premium cost of $0.02 per pound.On the day the option matures,the spot exchange rate is $1.8 per pound.What will be the value of the pound payable in U.S.dollars,if the U.S.firm exercises the option?
A) $91,000
B) $86,000
C) $85,000
D) $81,000

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The Answer of An American firm has just bought merchandise from a British firm for £50,000 on terms of 90-day payment.This firm has purchased a 3-month call option on 50,000 pounds at a strike price of $1.7 per pound and a premium cost of $0.02 per pound.On the day the option matures,the spot exchange rate is $1.8 per pound.What will be the value of the pound payable in U.S.dollars,if the U.S.firm exercises the option?
A) $91,000
B) $86,000
C) $85,000
D) $81,000

An American Firm Has Just Bought Merchandise from a British