received an order to sell goods to a foreign customer at a price of 1 million euros. The goods will be shipped and payment will be received in three months on September 1, Year 1. On June 1, Tsanumis Corporation purchased an option to sell 1 million euros in three months at a strike price of $1.00. The option is properly designated as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is measured through reference to changes in the spot rate. Relevant exchange rates and option premiums for the euro during Year 1 are as follows