Carson Printing is a U.S. multinational that just purchased £600,000 of goods on account, due in 30 days from a British supplier. The spot exchange rate is $1.775/£. Carson wants to hedge the account payable with an OTC call option with a strike price of $1.800/£. The option premium is 0.50 percent, and the 30-day periodic rate in the U.S. is 0.40 percent. If the spot exchange rate in 30 days is $1.825/£, what is the total cost of the account payable (including the cost of the option)?
A) $996,324
B) $998,589
C) $1,010,089
D) $1,083,000
E) $1,085,346

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The Answer of Carson Printing is a U.S. multinational that just purchased £600,000 of goods on account, due in 30 days from a British supplier. The spot exchange rate is $1.775/£. Carson wants to hedge the account payable with an OTC call option with a strike price of $1.800/£. The option premium is 0.50 percent, and the 30-day periodic rate in the U.S. is 0.40 percent. If the spot exchange rate in 30 days is $1.825/£, what is the total cost of the account payable (including the cost of the option)?
A) $996,324
B) $998,589
C) $1,010,089
D) $1,083,000
E) $1,085,346

Carson Printing Is a U