Lee Australia is expected to receive US$500,000 from an importer in the USA in three months from now. The company is considering to hedge currency risk by using: (a) a forward hedge; (b) an option hedge. Relevant information is provided below.

The spot exchange rate is A$/US$0.7628. However, the company expects in three months that the exchange rate will move to A$/US$0.8024 when it receives the US$500,000.

90-day forward rate of A$/US$ as of today is 0.7828.

A call option on US$ that expires in 90 days has an exercise price of A$/US$0.7800 and a premium of US$0.02.

A put option on US$ that expires in 90 days has an exercise price of A$/US$0.7728 and a premium of US$0.02.

Which is the best strategy for the company to avoid receiving the least amount of A$ by hedging its exchange rate risk? Justify your answer.

I am very confused with this problem if you can please give step by step illustrations and explain it clearly.