You are a U$.$S$.-$based importer of bicycles and just bought competition$-$style bicycles for $105,000$ from Italy. You owe $105,000$ to the Italian supplier in one year. You are concerned about the amount of dollars you will have to pay for this purchase in one year. Suppose:

Spot exchange rate is $$1\mathrm{.}75$ per euro

Forward exchange rate is $$1\mathrm{.}50$ per euro

U$.$S$.$ interest rate is $3\mathrm{.}25\%$ per annum

Interest rate in Europe is $4\mathrm{.}25\%$ per annum

Call option with strike price of $$1\mathrm{.}55$ per euro is available with premium of $$0\mathrm{.}35$ per euro.

Put option with strike price of $$1\mathrm{.}55$ per euro is available with premium of $$0\mathrm{.}45$ per euro.