The CFO of an European exporter is facing a dilemma: he has some risks on the 1 year EUR / USD spot evolution (risk on the upside of the EUR / USD) but is not sure that he wants to hedge his position.

The following info are available:

EUR / USD spot = 1.2500

EUR / USD forward = 1,2650

Premium of Call EUR / USD 1Y Strike 1,2600 = 0.0325

Premium of Put EUR / USD 1Y Strike 1,2600 = 0.0375

c)If the CFO thinks that the EUR / USD should go a little bit higher but not more than 0,5%, what is the best solution for his risk exposure?

d)If the CFO thinks that the EUR / USD should go a little bit lower but not more than 0,5%, what is the best solution for his risk exposure?

e)If the CFO thinks that the EUR / USD should go a little much higher what is the best solution for his risk exposure?

f)If the CFO thinks that the EUR / USD should go a much lower, what is the best solution for his risk exposure?

g)What anticipation for the future evolution of the EUR / USD would prompt the CFO to hedge with options?

h)One the CFO interns thinks that hedging the exposure can be done either by buying or selling options? Is it true?