In Example $10\mathrm{.}2,$ a forward contract was used to establish a derivatives "hedge" to protect Centralia

from a translation loss if the euro depreciated from $\frac{1\mathrm{.}1000}{\text{\$}}1\mathrm{.}00$ to $\frac{1\mathrm{.}1786}{\text{\$}}1\mathrm{.}00.$ Assume that an

over$-$the$-$counter put option on the euro with a strike price of $\frac{1\mathrm{.}1393}{\text{\$}}1\mathrm{.}00($or $$\frac{0\mathrm{.}8777}{}1\mathrm{.}00)$ can

be purchased for $$0\mathrm{.}0088$ per euro. Show how the potential translation loss can be "hedged" with an

option contract.