An importer want to use call option to hedge its pound payables £31,250 for $.02 per pound. The strike price was $1.44 and the spot rate at the time the option was exercised was $1.47. There are £31,250 in a British pound option. What is the net US$ amount the importer paid for this option? Please draw a contingency diagram and mark the breakeven point.
Step by step explanation please, and how to draw a contingency diagram.