Crime and Punishment, a US company has made a contract to sell axes to a retailer in Germany for 1,000,000. The sale was donein June with payment due three months later in September. Crime and Punishmentconsiders thehedging alternatives to diminishthe exchange rate risk which arises from the sale. Crime and Punishments treasurer, Mr. Raskolnikov gathered the following information. The spot exchange rate is $1.15/euroRaskolnikovsforecast for 3-month spot ratesis $1.10/euroThethree month forward rate is $1.12/euroOctobercall options for 500,000; strike price $1.13, premium price is 1%October putoptions for 500,000; strike price $1.13, premium price is 1%Annual WACC is 4%.Which hedging alternative will be better off than, if hehad nothedged andhis predicted exchange rate for 3months had been correct? Show the calculations for different hedging alternatives.