Question: Question 5 Please use the following information to answer the next question: A US firm's Accounts Payables (in UK ) due in 1 GBP

Question 5 Please use the following information to answer the next question:

Question 5 Please use the following information to answer the next question: A US firm's Accounts Payables (in UK ) due in 1 GBP 5,000,000 year Current Spot rate for GBP is Annual interest rate in US is $2.00 5% Annual interest rate in UK is 8% I-year Forward rate for GBP is $1.98 If the firm uses a MONEY MARKET HEDGE, one year from now, their accounts payable will cost them: O USD 5,000,000 O USD 9,722,222 O USD 9,259,259 USD 9,900,000 7.5

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