1. Our firm in the U.S. will need 1 million Euros in mid-April in order to pay a European worker. Our current spot price is $1.1575/ Euro. So, at the spot our value now goes from 1 million to $1,157,500. Management within the firm fears that the $ will weaken and the $ cost to buy Euros in April may become higher. We need to arrange an options hedge so that our maximum "all in net cost" (include the option premium) does not go over $1,175,500. List ONE option that will meet the $1,175,500 maximum "all in net purchase cost (make sure option hedge cost is included) in mid-April. Give answer for #1-A-B.

Circle Type	Option month	Option's strike price	Option Premium per Euro	Total cost of Options on 1 million Euro at t=0	Total "all in net cost" of 1 million Euro (include option cost) if it is exercised
Call or Put				1-A	1-B

OUR SPOT > $ 1.1575 / EURO Exercise Price U.S. Cents / Euro Call Option Premium U.S. Cents / Euro Put Option Premium Exercise Price December April December April 1.1300 1.1300 3.85 0.65 1.1350 1.1350 1.1400 1.1400 3.10 0.90 1.1450 1.1450 1.85 0.50 1.1500 1.1500 1.50 2.40 0.65 1.25 1.1550 1.1550 1.17 0.85 1.1600 0.90 1.80 1.05 1.65 1.1600 1.1650 0.67 1.35 1.1650 1.1700 0.50 1.35 1.65 2.15 1.1700 1.1750 0.35 2.00 1.1750 1.1800 0.95 2.75 1.1800 OUR SPOT > $ 1.1575 / EURO OUR SPOT > $ 1.1575 / EURO Exercise Price U.S. Cents / Euro Call Option Premium U.S. Cents / Euro Put Option Premium Exercise Price December April December April 1.1300 1.1300 3.85 0.65 1.1350 1.1350 1.1400 1.1400 3.10 0.90 1.1450 1.1450 1.85 0.50 1.1500 1.1500 1.50 2.40 0.65 1.25 1.1550 1.1550 1.17 0.85 1.1600 0.90 1.80 1.05 1.65 1.1600 1.1650 0.67 1.35 1.1650 1.1700 0.50 1.35 1.65 2.15 1.1700 1.1750 0.35 2.00 1.1750 1.1800 0.95 2.75 1.1800 OUR SPOT > $ 1.1575 / EURO