Palmetto Bug Extermination Corporation (PBEC), a U. S.company, regularly purchases chemicals from a supplier in Switzerland with the invoice price denominated in Swiss francs.PBEC has experienced several foreign exchange losses in the past year due to increases in the U. S.dollarprice of the Swiss currency.As a result, Dewey Nukem, PBEC's CEO, has requested information about the possibility of using derivative financial instruments, specifically foreign currency forward contracts and foreign currency options, to hedge the company's exposure to foreign exchange risk.