This question is related to Foreign exchange and international finance. Thanks, and definite thumbs up for answers! I have posted multiple parts of this question series recently, I only need answer for this part please.

Questions 23-36 are based on the following information: Transaction Exposure Problem: (34 points in total) Suppose that you (i.e.. company XYZ) are a US-based importer of goods from Canada. You expect the value of the Canada to increase against the US dollar over the next 6 months. You will be making payment on a shipment of imported goods CAD100.000) in 6 months and want to hedge your currency exposure. The US risk-free rate is 5% and the Canada risk-free rate is 4% per year. The current spot rate is $1.25/CAD, and the 6-month forward rate is $1.3/CAD. You can also buy a 6-month option on Canadian dollars at the strike price of $1.4 /CAD for a premium of $0.10/CAD. If XYZ wants to hedge the transaction exposure using option hedge. XYZ should buy a put option o sell a put option buy a call option sell a call option