On December 1, 2018, Keenan Company, a U.S. firm, sold merchandise to Velez Company of Canada for 150,000 Canadian dollars (CAD). Collection of the receivable is due on February 1, 2019. Keenan purchased a foreign currency put option with a strike price of $.97 (U.S.) on December 1, 2018. This foreign currency option is designated as a cash flow hedge. Relevant exchange rates follow:DateSpot RateOption PremiumDecember 1, 2018$0.97 $0.05 December 31, 2018$0.95 $0.04 February 1, 2019$0.94 $0.03 ?Compute the U.S. dollars received on February 1, 2019.
A. $141,000
B. $142,500.
C. $138,000.
D. $136,500.
E. $145,500.
Answer: E
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