Consider a US-based importer of German automobile parts that purchases the parts in euros and sells them in dollars. The US firm has just ordered next year's inventory. In one year it owes a payment of €100,000 to the German supplier. Today's spot exchange rate is €1.00 = $1.50 and the one-year forward rate is €1.00 = $1.55. Which of the following strategies provides an effective hedge against the US firm's transaction exposure?
a. Since the spot rate is more than the forward rate, the US firm should trade dollars for euros today and pay the German supplier early.
b. Enter a short position in a one-year euro futures contract at €1.00 = $1.55.
c. Enter a long position in a one-year euro forward contract at €1.00 = $1.55.
d. Sell a call option on the euro with a one-year maturity.
e. All of the above.