Please use Excel to construct the plots and perform your computations

You work as a broker for a US company that imports European foods into the US$.$ You just signed a deal with an Italian producer of olive oil. Under the terms of the contract, in three months you will receive $405,000$ liters of olive oil in exchange for $900,000$ euros. You are going to sell the entire shipment of olive oil to Fresh Foods Market at $$3/$liter$.$ All cash flows occur in exactly three months

a$.$ Plot your profits from the deal $($on the $Y$ axis$)$ as a function of the spot exchange rate in three months $($on the $x$ axis$).$ Consider values of the exchange rate in the range to $$\frac{1\mathrm{.}4}{}.$ Label this line "Unhedged Profits."

The format of your graph should be as shown below:

a$.$ Suppose the one$-$year forward exchange rate is $$\frac{1\mathrm{.}10}{}.$ Describe how you could hedge the risk of the contract. In the figure you used for part a$)$ plot your total expected profits from the olive oil with forward hedge as a function of the exchange rate in three months. Label this line "Forward Hedge." Define position of the "forward Hedge" line precisely on the graph

b$.$ Suppose that instead of using a forward contract, you consider using options. Suppose there are foreign exchange $($euro$)$ options available with exactly three months to expiration and a size of one euro. A three$-$month call option to buy one euro at a strike price of $$\frac{1\mathrm{.}1}{}$ is trading for $$\frac{0\mathrm{.}06}{}.$ Similarly a three$-$month put option to sell $1$ euro at a strike price of $$\frac{1\mathrm{.}1}{}$ is trading for $$\frac{0\mathrm{.}06}{}.$ How would you hedge your profits from the olive oil deal using option contracts? Which type of options would you use $-$ put or call? Explain. Please be specific

c$.$ Compute profits from the deal with the options hedge for spot exchange rate in three months from the range $$\frac{0\mathrm{.}95}{},$$$\frac{1\mathrm{.}4}{}($do not disregard options cost$).$