March 1, 1998, Bechtel Submits a Franc?denominated Bid on a Project

Multiple Choice

March 1, 1998, Bechtel submits a franc?denominated bid on a project in France. Bechtel will not learn until June 1 whether it has won the contract. What is the most appropriate way for Bechtel to manage the exchange risk on this contract?

A) sell the franc amount of the bid forward for U.S. dollars
B) buy French francs forward in the amount of the contract
C) buy a put option on francs in the amount of the franc exposure
D) sell a call option on francs in the amount of franc exposure