ThrillerInc., a Canadiancorporation, buys raw materials from ZhinTaoCorporation, a Chinesecompany, delivering in 3months' time. The value of the contract is 2 million yuan(CNY), paid in Chinese yuan. The current exchange rate is0.2000CAD/CNY. Thriller Inc. Management is exploring the options to hedge theirposition, and contacts RBC for advice. RBC has two options forthem: (1) enter into a3-month forward contract at forward rate of0.2126CAD/CNY. (2) buy a call option with exercise price of0.2095CAD/CNY expired in 3months' time with an upfront premium of 0.008CAD for each CNY. Explain the differences between the forward contract and the call option. In thiscase, which one should Thriller Inc. choose andwhy?