If Interest Rate Parity Exists and Transaction Costs Are Zero

Multiple Choice

If interest rate parity exists and transaction costs are zero, the hedging of payables in euros with a forward hedge will:

A) have the same result as a call option hedge on payables.
B) have the same result as a put option hedge on payables.
C) have the same result as a money market hedge on payables.
D) require more dollars than a money market hedge.
E) have the same result as a call option hedge on payables AND require more dollars than a money market hedge.