Suppose that the exchange rate is $1\mathrm{.}25=1\mathrm{.}00.$Options $($calls and puts$)$ are available on the Philadelphia exchange in units of $10,000$ with strike prices of $$1\mathrm{.}60/1\mathrm{.}00.$Options $($calls and puts$)$ are available on the Philadelphia exchange in units of $10,000$ with strike prices of $$2\mathrm{.}00/1\mathrm{.}00.$ For a U$.$S$.$ firm to hedge a $100,000$ payable,

Multiple Choice

buy $10$ call options on the euro with a strike in dollars.

sell $10$ call options on the euro with a strike in dollars.

sell $8$ put options on the pound with a strike in dollars.

buy $8$ put options on the pound with a strike in dollars.