A Japanese EXPORTER has a €1,000,000 receivable due in one year. Detail strategies using options that will eliminate exchange rate risk given the following information:
Option contract size
Strike price
Euro €62,500
¥125 = €1.00
Yen ¥12,500,000
€0.008 = ¥1.00
Group of answer choices
Buy 16 put options on euro or buy 10 call options on yen
Sell 16 put options on euro or buy 10 call options on yen.
Sell 16 call options on euro or buy 10 put options on yen.
Buy 16 put options on euro or sell 10 call options on yen.