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Use the following information to calculate the dollar cost of using a money market hedge to hedge 200,000 pounds of payables due in 180 days. Assume...

5. Use the following information to calculate the dollar cost of using a money market hedge to
    hedge 200,000 pounds of payables due in 180 days. Assume the firm has no excess cash.
    Assume the spot rate of the pound is $2.02, the 180-day forward rate is $2.00. The British
    interest rate is 5%, and the U.S. interest rate is 4% over the 180-day period.
a. $391,210.
b. $396,190.
c. $388,210.
d. $384,761.
e. none of the above.

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