6. A US importer is buying 1 million of equipment to be paid in December. The current spot rate is $0.5614 per DM (Mark). How can he/she hedge against unexpected exchange rate changes using options? Assume that he/she wants a strike price of $0.57. Use the attached Wall Street Journal schedule.

Option and Strike Underlying Price	W. Ger. Mark-Cents per units	Calls-Last			Puts-Last
62,500 DM		Nov.	Dec.	Mar.	Nov.	Dec.	Mar.
56.14	51	r	r	r	r	0.06	0.32
56.14	52	r	r	r	0.03	0.09	0.52
56.14	53	r	r	r	0.05	0.28	0.65
56.14	54	r	r	r	0.15	0.22	r
56.14	55	r	1.92	r	0.33	0.43	r
56.14	56	0.97	1.23	1.99	0.96	75	r
56.14	57	0.54	0.82	r	r	r	r
56.14	58	0.40	0.38	1.15	r	r	r
56.14	59	s	.30	r	s	3.10	r

Option and Strike Underlying Price	W. Ger. Marks-EuropeanStyle	Calls-Last			Puts-Last
62,500 DM		Nov.	Dec.	Mar.	Nov.	Dec.	Mar.
56.14	56	r	r	r	r	r	1.40
56.14	57	r	r	1.55	r	r	r

r: Not traded

s: No option offered