4. You are given the following information regarding options on the U.S. dollar priced in euros: S[EUR/USD] - 9380 F(3m)[EUR/USD] - 9364 (mid-market rate) Puts Calls Strike Bid Ask Bid Ask 0.890 0.0047 0.0052 0.0524 0.895 0.0057 0.0062 0.0485 0.0529 0.0489 0.0451 0.0415 0.900 C0.0074 0.0447 0.0069 0.0082 0.905 0.0087 0.0411 0.975 0.0485 0.0489 0.0101 0.0106 0.980 0.0524 0.0529 0.0091 0.0096 0.985 0.0570 C0.0082 C0.0087 0.0565 0.0607 0.990 0.0611 0.0074 0.0080 Note: all quotes are expressed as the cost to hedge one dollar. (a) What is the at-the-money strike price for puts and calls implied by this table? (b) You work for a European manufacturer that has a $10 million liabiltiy due in three months' time. Based upon the prices listed above, how much would you have paid to hedge the risk of an appreciation of the U.S. dollar assuming you purchased anoption that was 5% out-of-the-money? [Note: express your answer in euros.]