Pont Has Entered into a Currency Risk Sharing Arrangement with British

Multiple Choice

Pont has entered into a currency risk sharing arrangement with British Gas. Under the contract, Du Pont agrees to pay British Gas a base price of $10 million for gas purchases, but the parties would share the currency risk equally beyond a neutral zone, specified as a band of exchange rates: $Within the neutral zone, Du Pont must pay BG the pound equivalent of $10 million at the base rate of $Suppose the spot rate at the time of payment is £1 = $How much will Du Pont owe British Gas?

A) $10 million
B) $9,702,381
C) $9,588,235
D) $9,819,277