Airbus sold an aircraft, A380, to United Airlines, a U.S. company, and billed $80 million payable in 3 months. Airbus is concerned with the euro proceeds from international sales and would like to control exchange risk. The current spot exchange rate is $1.10/ and three-month forward exchange rate is $1.08/ at the moment. Airbus can buy a three-month put option on U.S. dollars with a strike price of 0.96/$ for a premium of 0.03 per U.S. dollar. Currently, three-month interest rate is 2.4% (per annum) in the euro zone and 3.2% (per annum) in the U.S.

1. If Airbus decides to hedge using money market hedge, what would be the guaranteed euro proceeds from the American sale (rounded to the nearest )?

2. If Airbus decides to hedge using put options on U.S. dollars, what would be the expected euro proceeds from the American sale? Assume that Airbus regards the current forward exchange rate as an unbiased predictor of the future spot exchange rate.