6. John Deere’s Chinese acquisition (intermediate). The U.S. farming equipment giant just won approval from the Chinese authorities for the acquisition of Shen-Zhen Excavators Ltd. – a medium-sized Chinese manufacturer of small earthmoving equipment (Bobcat style) – for yuan (CNY) 615 million with payment due in six months. The current spot and six-month forward rates are respectively CNY 6.75 = US$1 and CNY 6.50 = US$1. Hong Kong and Shanghai Bank’s currency desk further advises John Deere that over-the-counter six-month European put and call options are available at respective premiums of 2.4 percent and 3 percent for a strike price equal to the forward rate. Interest rates in CNY and US$ are, respectively, 10 percent and 4 percent on an annual basis. Sketch John Deere’s alternative hedging options.What would be your recommendation given that the Chinese currency is heavily stabilized by the Bank of China?