Assume that xxx has to pay for AU $ 100 million supplies in 1 year. xxx has to decide whether to protect its position and thus decide which type of protection ("hedging") is the most convenient. Use the following information to conduct your analysis and make the correct decision.

Spot rate of AU $ Forward rate AU $ - 1 ao One year call option One-year put option $0.77 $0.77 Exercise price - $0.70 Premium - $0.05 Exercise price - $0.72 Premium - $0.01 U.S. 7% 9% Rate $0.73 $0.74 $0.76 Australia 4% 6% Probability 25% 45% 30% Forecasted spot rate of AU$