B. By purchasing pounds now, the American importer is able to determine now the amount of dollars that will be required to settle that invoice when it comes due. As such, they are protected against the situation in which the dollar depreciates against the pound. If the dollar were to appreciate, and the importer had not entered into this agreement, they would need to spend more dollars in order to settle the invoice.

C. This answer is somewhat correct in that the U.S. importer will need to sell dollars. However, more than the need to sell dollars, they need to buy pounds in the forward exchange market. Since this choice makes no mention of the purchase of pounds, it is only half correct.

D. Selling pounds in the forward exchange market will not help the importer because they need to use their dollars to buy pounds in order to settle the invoice in the future.