A U$.$S$.-$based MNC has just signed a contract with a German company that calls for the U$.$S$.$ MNC to provide the German company with consulting services over a three$-$month period that entails payments in euros. At the spot rate of $$1\mathrm{.}0782/,$ the current dollar value of the contract is $$175$ million. At the same time the U$.$S$.$ company signs a three$-$month contract with another German company to buy supplies for three$-$ month delivery and agrees to settle its bill in euros. The current dollar value of the euro contract is $$45,616,000.$ At the same time, the U$.$S$.$ MNC signs a contract to export $$60$ million worth of its finished product to Ecuador. Also, for delivery and settlement in three months $($Ecuador uses the U$.$S$.$ dollar as its home currency$).$ The U$.$S$.-$based MNC is particularly worried about a high degree of uncertainty in the foreign exchange markets. So$,$ it decides to evaluate its hedging alternatives. The following information is available:Spot$$ $$1\mathrm{.}0782/$ Bid $$1\mathrm{.}0926/$ Ask$3-$month forward$$ $$1\mathrm{.}0764/$ Bid $$1\mathrm{.}0908/$ Ask$6-$month forward$$ $$1\mathrm{.}0876/$ Bid $$1\mathrm{.}1020/$ Ask$3-$month futures$$ $$1\mathrm{.}0762/$ Bid and $$1\mathrm{.}0906/90-$day call option #$1$ $ $1\mathrm{.}0805/$ strike; $ $0\mathrm{.}0390/$ premium$90-$day put option #$1$ $ $1\mathrm{.}0805/$ strike; $ $0\mathrm{.}0040/$ premium$180-$day call option #$2$ $ $1\mathrm{.}0808/$ strike; $ $0\mathrm{.}0092/$premium$180-$day put option #$2$ $ $1\mathrm{.}0808/$ strike; $ $0\mathrm{.}0104/$ premium$90-$day dollar interest rate$6\mathrm{.}40\%$ per annum $($deposit$)7\mathrm{.}20\%$ per annum $($loan$)90-$day euro interest rate$6\mathrm{.}80\%$ per annum $($deposit$)7\mathrm{.}40\%$ per annum $($loan$)$please just not paragraph I already saw an answer similar to this example.$1-$Specify exactly what your exposure is and how you arrive at it$\mathrm{.}2-$Show how each of these hedging alternatives can be achieved$\mathrm{.}3-$ Assume the following probability distribution for the euro spot rate at the end of three months. Analyze the option versus the no$-$hedge alternatives and decide which alternative is probably the better one of the two and why.S$1$ Probability$$1\mathrm{.}0960/30\%$$$1\mathrm{.}0380/40\%$$$1\mathrm{.}0210/30\%4-$Demonstrate how you compare all alternatives in part II above in terms of cost$/$benefit and risk and how to choose the best alternative.$$