foreign exchange management

Question 3: An importer has to pay USD 5,00,000 at the end of 6 month from today. The Importer considering the following alternative to manage the exposure i.e. use forward or use option or remain unhedged. The following information is provided by the importer. US Dollar Spot rate Rs 74.80 6-Month Forward Rate for US Dollar Rs 75.20 Interest rates 10% per annum. Call option due 6-month at Strike Price Rs 75.00 at premium Rs 0.50. Expected Spot rate for 6-Months Rs 74.90/$ (probability 20%) Rs 75.00/$ (Probability 50%) Rs 75.10/$ (Probability 30%) Examine the alternatives and suggest which method will be appropriate for the importer